1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
9966 [12]
3 years ago
6

The risk-free rate of interest, kRF, is 6 percent. The overall stock market has an expected return of 12 percent. Nutshell, Inc.

has a beta of 1.2. What is the required return of Nutshell, Inc. stock? *
Business
1 answer:
timurjin [86]3 years ago
5 0

Answer:required return of Nutshell, Inc. stock = 13.2%

Explanation:The Required return also called Hurdle rate is the  minimum return in percentage which  an investor should receive  from doing business or investing in a business   to compensate for  the risks associated with the business. The more risky the investment, the more  high returns and the  less risky investment, the lower the returns.

Required Rate of Return = Risk Free Rate + Beta x (Whole Market Return – Risk Free Rate)

given

risk-free rate = 6%

market return= 12 %

beta = 1.2

Required Rate of Return = Risk Free Rate + Beta * (Whole Market Return – Risk Free Rate

= 6% + 1.2 x (12% - 6%) = 6% + 1.2 x 6% = 0.06 + 1.2x 0.06= 0.06 + 0.072=0.132  x 100 = 13.2% 

You might be interested in
Use the following items to determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows
Alexxandr [17]

Answer: should be b

Explanation:

4 0
3 years ago
everything else held constant, the interest rate on municipal bonds rises relative to the interest rate on treasury securities w
posledela

Interest rates would increase since the tax-exempt status of municipal bonds would lose some of its appeal and there would be less of a market for them as a result of the lower income tax rates.

When the income tax rate is reduced for municipal bonds, the value of the bonds will also decline because the tax-exempt status for the bonds will also be reduced as a result of the lower income tax rate. Additionally, it lessens the demand for municipal bonds.

To know more about the municipal bond visit here :

brainly.com/question/23962246

#SPJ4

6 0
11 months ago
The __________ phase of the strategic marketing process usually results in a __________ that sets the direction for the marketin
Paraphin [41]

Answer:

C. planning; marketing plan

Explanation:

A marketing process is the establishment of goals for a marketing campaign. <em>During the planning phase, you'll need to set your target customers and how to approach them, this will lead to specific and measurable goals to direct your next actions.</em>

I hope you find this information useful and interesting! Good luck!

7 0
2 years ago
Which of the following would likely be covered under homeowners insurance but NOT by renter's insurance? AA fire destroys almost
Cloud [144]
D a tree branch breaks your window
5 0
3 years ago
19) Which of the following is a fom of business organization that offers limited liability to its owners
Lisa [10]

Answer:

B. Corporation

Explanation:

Corporation is a complex structure of business ownership recognized as separate and distinct from its owners.  A corporation is subdivided into small units called stocks, equity, or shares. Each share or stock represents a small part of the company. Owning a share of a corporation is equivalent to owning a small portion of the corporation. A corporation issues shares to investors when it intends to raise additional capital. The shares of corporations are traded at the securities exchange markets.

Shareholders is the title given to owners of a corporation's shares. one feature of a corporation is that it offers its shareholders limited liability to the company's debts. Should the corporation fail in meeting its obligations, shareholders' personal assets cannot be used to settle the debts.

6 0
2 years ago
Other questions:
  • You decide to buy a new car. You talk to friends about it, research mechanical specifications in Consumer Reports, test drive di
    8·1 answer
  • My Work Ramon works for a large company that is considering starting a new business unit to sell personalized coffee mugs. He ha
    5·1 answer
  • Which of the following is an assumption of a special order decision? Group of answer choices The special order sales will not af
    8·1 answer
  • A person running for political office is called a ____.
    6·2 answers
  • Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current
    7·1 answer
  • IBM signs an agreement to lend one of its customers $200,000 to be repaid in one year at 5% interest. IBM would record this loan
    14·1 answer
  • Define the term Agriculture​
    8·2 answers
  • GPB's contribution margin ratio is 85% ( or .85) and its fixed monthly expenses are $63,000. Assume that the cost structure of G
    7·1 answer
  • If country A has a comparative advantage in the production of good X over country B, then: _______________
    5·1 answer
  • Guiding Question
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!