What is the screening effect?

A. the theory that the completion of college indicates to employers that a job applicant is intelligent and hardworking
B. all nonmilitary people who are employed or unemployed
C. the theory that education increases productivity and results in higher wages
D. a temporary or part-time job

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.