Read the following article: Despite Warnings. Drug Giant Took Long Path to Vioxx Recall The Vioxx recall resulted in loss of trust with lenders and a higher required return with shareholders. As a result the cost of capital increased for Vioxx. What affect does this increase have on future projects and capital investments for the company?

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.