In a market where negative externalities are associated with consumption and production, the equilibrium will not be efficient because: A) Firms will shut down until costs are reduced B) Too many resources will be allocated towards producing the good C) Costs of production will, on average, be too high D) Too few resources will be allocated towards producing the good

Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.