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lutik1710 [3]
3 years ago
12

Lego is considering an investment in Disney corporation. The risk free rate is 5% and the Beta for Disney is 1.2. Lego requires

a market premium of 10%. What percent return does Disney need to earn to trigger a Lego investment?
Business
2 answers:
Lelechka [254]3 years ago
7 0

Answer:

⇒ 17%

Explanation:

To compute the require rate of return, we use the Capital Assets Pricing (CAPM) Model:

CAPM = Risk Free Rate + Beta (Market Risk Premium)

CAPM = Rf + β (Rm)

CAPM = 5% + 1.2(10%)

CAPM = 5% + 12%

CAPM = 17%

disa [49]3 years ago
5 0

Answer:

17%

Explanation:

This can be calculated using the Capital Asset Pricing Model which is given as under:

Required Return = Rf + Beta factor * (Market Risk Premium)

By putting the values, we have:

Required Return = 5% + 1.2 * 10% = 17%

Disney need to earn 17% return on investment to trigger a Lego investment.

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spin [16.1K]

Answer and Explanation:

The adjusting entry is as followS:

Rent expense $2,500

      To Prepaid rent $2,500

(Being rent expense is recorded)

Here the rent expense is debited as it increased the expenses and credited the prepaid rent as it decreased the assets

The rent for one month is

= $15,000 ÷ 6 months × 1 month

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7 0
2 years ago
Question 10 of 36
lana66690 [7]

Answer:

A

Explanation:

To answer the question, we look at an extreme scenario of 0% interest rate and see the minimum repayment Jade will make on the loan taken

Therefore,

Interest Rate = 0%

This means that the loan to be paid will be calculated as follows

Monthly payments x 12 Months x 14 Years

= $195 x 12 months x 14 years = $32, 760

The meaning of this outcome is that the lower the interest rate to be paid, the higher the size of the loan, because at 2.9% the loan= $26,898.98 and at 0% rate the loan= $32, 760.

The conclusion therefore is a 2.7% interest rate which is lower than 2.9% but not as low as the extreme 0% will cause the loan amount to be higher than $26,898.98. This affirms option A.

Options B and C are wrong because 2.5% and 2.3% are lower than 2.9%, therefore, the loan amount will be higher. Option D is also wrong because a 3.1% interest rate is higher than 2.9%, therefore, the amount should be lower not higher than $26,898.98

7 0
2 years ago
Instead of living in a service economy, we now live in a(n) ________ economy.
Nataly [62]

Instead of living in a service economy, we now live in a(n)  Mixed economy.

Explanation:

  • A mixed economy consist of  both private and government /state owned economies which  share control of owning, making, selling, and exchanging good in the country.
  • U.S. and France are two example of Mixed Economy
3 0
3 years ago
Vaughn Manufacturing's prepaid insurance was $197000 at December 31, 2021 and $90300 at December 31, 2020. Insurance expense was
Zina [86]

Answer:

Cash disbursements for insurance would be $ 168,700.

Explanation:

In accrual based accounting expenses are recorded when they are incurred. The payment against item purchased does not make it qualified to be recorded as expense. Any advance payment made is recognize as asset untill performance obligation has been completed. So in order to determine amount of payment we will use following accounting equation.

Payments = Prepaid current period + expenses - opening prepaid balance

Payments = 197,000 + 62,000 - 90,300 = $ 168,700

8 0
3 years ago
The population p, in millions, of a certain country can be calculated by p=0.83t54, where t is the time in years, and t = 0 repr
dalvyx [7]
P(t) = (0.83)t^(5/4) 
<span>2096 - 2015 = 81 </span>
<span>81 ^ (5/4) = 243 </span>
<span>243 × 0.83 = 201.69 </span>

<span>Population in 2096 expected to be 202 million.</span>
3 0
3 years ago
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