8.0% is the required return, assuming a risk free rate of 4% and a market rate of 7%
In a free market, the market rate for products or services is the usual price charged for them. When demand rises, producers and laborers tend to respond by raising the price they demand, so setting a higher market rate. When demand falls, market rates tend to fall as well.
The market rate, defined as the interest rate on a loan or investment that is typically accessible on the market for that product, defined the tool's cost of benefit. The market rate for a loan is the average rate of interest charged to the receiver by a range of providers.
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