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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% 

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Answer:

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Explanation:

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3 years ago
If a company spends $20 million to install new footwear-making equipment with capacity to produce 1 million pairs of athletic fo
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Explanation:

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We will make assumptions which include the following,

Life of the equipment = 10 Years

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Those are our 2 assumptions.

In that case then,

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= $2 million

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That would mean that annual depreciation costs at that facility will rise by $2 million or 10%.

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3 0
3 years ago
The constraint at Pickrel Corporation is time on a particular machine. The company makes three products that use this machine. D
rosijanka [135]

Answer:

JT, SM, VD

Explanation:

Calculation to rank the products in the order in which they should be emphasized

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$ 270.18 $ 310.88 $ 91.96

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JT, SM, VD

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Answer:

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