Answer: 0.1463

The required rate of return on shares is calculated using the Capital Asset Pricing Model (CAPM). **CAPM Formula:** Required rate of return = Risk-free rate + Beta × (Market Return - Risk-free rate) **Given:** - Risk-free rate = 7.5% = 0.075 - Market Return = 17% = 0.17 - Beta = 0.75 **Calculation:** Required rate of return = 0.075 + 0.75 × (0.17 - 0.075) = 0.075 + 0.75 × 0.095 = 0.075 + 0.07125 = 0.14625 ≈ 14.63% Therefore, the required rate of return is 14.63%, which corresponds to option D (0.1463).

Author: Tanishq Prabhu