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
In order to have a high confidence level in a customer survey, what should the sample size accurately reflect?
Damm [24]

In order to have a high confidence level in a customer survey, the sample size accurately reflects the entire population.

A discrete collection of entities with identifiable characteristics, such as humans or animals, for the purposes of analysis and data collection is called a population. It consists of a group of similar species that can inhabit a specific geographical location and interbreed.

A group of people, things, events, organizations, etc. Use populations to draw conclusions. Figure 1: Population. An example of a population is the entire student body of a school. Includes all students studying at the school when the data was collected.

Learn more about population here:brainly.com/question/1437549
#SPJ4

7 0
2 years ago
The ______ requires that if a new employee had group health insurance at a previous employer and the new employer has healthcare
IRINA_888 [86]

Answer:

The correct answer is C. Consolidated Omnibus Budget Reconciliation Act.

Explanation:

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. This law guarantees employees the right to make payments for group medical insurance in order to maintain the insurance they would otherwise lose after:

- The reduction of your work hours.

- Leave the job.

- Job loss

Most people can keep insurance for up to 18 months. Some people may be able to keep it for a few months longer than that.

4 0
3 years ago
Vertical accountability refers to the ability of _________.
Wewaii [24]

Answer:

Vertical accountability refers to the ability of

a. individuals and groups to hold state institutions accountable

Explanation:

When discussing accountability in governance, there are different types which include vertical accountability and horizontal accountability.

Vertical accountability refers to the ability of individuals and groups to hold state institutions accountable and horizontal accountability refers to the ability of the legislature to hold the executive accountable.

4 0
3 years ago
On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The in
const2013 [10]

Answer: January 26

Explanation:

A life insurance policy is simply a contract that an individual has with an insurance company whereby the individual makes premium and in turn, the insurance company would have to give a death benefit, to the beneficiaries of the insurance policy once the insured dies.

Based on the information in the question, the coverage become effective on January 26 which was the day the policy was delivered and the first premium was collected.

3 0
3 years ago
BRAINLIEST
matrenka [14]
Store 
department
class
sub-class 
styles
4 0
4 years ago
Other questions:
  • The risk-free rate of return is 4%, and the market return is 10%. The betas of Stocks A, B, C, D, and E are 0.85, 0.75, 1.20, 1.
    12·1 answer
  • Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What i
    8·1 answer
  • Karen doesn’t like driving to the local bank branch, but doesn’t think that it is secure to do financial transactions on her pho
    10·1 answer
  • A severe freeze has once again damaged the florida orange crop. the impact on the market for oranges will be a leftward shift in
    11·1 answer
  • Why does a bank sometimes hold excess reserves?
    5·2 answers
  • Mark and julie are going to sell brownies and cookies for their third annual fundraiser bake sale. In one day, mark can make 40
    10·1 answer
  • At the beginning of the period, a company reports a balance in office supplies of $500. During the period, the company purchases
    8·1 answer
  • . ________ pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss
    7·1 answer
  • Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on January 1, 2016. The bonds mature on De
    6·1 answer
  • On January 1, 2021, Bishop Company issued 6% bonds dated January 1, 2021, with a face amount of $33 million. The bonds mature in
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!