ABC Company holds a well-diversified portfolio in the amount of $90,000 that has an expected return of 11.0% and a beta of 1.27. It is buying 1,000 shares of DEF Company stock at $10 a share and...

ABC Company holds a well-diversified portfolio in the amount of $90,000 that has an expected return of 11.0% and a beta of 1.27.  It is buying 1,000 shares of DEF Company stock at $10 a share and adding them to its portfolio. DEF Company has an expected return of 13.0% and a beta of 1.57.  Currently, the risk free rate is 3.5%, and the stock market return is 8.2%.

What will the required rate of return on the new portfolio be after the purchase of DEF stock? (Hint: Compute a new portfolio beta first and then use the CAPM.)