Bubs Australia is a public listed company in ASX. It is considering issuing ordinary shares to raise capital. a) Bubs Australia has a Beta of 1.2. The long-term return of the ASX200 (i.e. the market portfolio) is 8% per annum, and the market risk premium is 5%. Without calculation, use the meaning of Beta to explain if Bubs Australia's expected rate of return would be higher or lower than the market portfolio return?
