Answer:
17.48
Explanation:
In order to calculate this we need to apply the Capital Asset Pricing Model(CAPM) formula,
Required rate = Risk free rate + Beta(Market risk-Risk free rate)
Required rate = 0.025 + 1.4( 0.132 - 0.025)
Required rate = 0.1748.
Hence the calculated required annual return for the company's stock equals 17.48
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