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Ultra Corp. stock has a beta (β) of 1.2. The expected rate of return on the...

Ultra Corp. stock has a beta (β) of 1.2. The expected rate of return on the S&P 500 is 14% and the return on Treasury bills is 2.5%. What is the expected return of Ultra's. stock?

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Ra= Rf+B(Rm-Rf)
Rf 2.50%
B                                                 1.20
Return on S&P 14.00%
Ra= 2.50%+1.20*(14%-2.50%)
Ra= 16.30%
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