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lutik1710 [3]
2 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]2 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]2 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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In doing a Kodak SWOT analysis, which of the following represents a traditional strength that the company leveraged into the new
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Answer:

The correct answer is letter "D": R&D.

Explanation:

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6 0
3 years ago
Rhonda, a general manager, makes a decision on behalf of the business that leads to some personal financial gains, while the com
noname [10]

Answer:

Conflict of interest .

Explanation:

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8 0
3 years ago
The following transactions have been journalized and posted to the proper accounts: 1. Mark Call invested $7,000 cash in his new
goblinko [34]

Answer:

$6,450

Explanation:

Calculation to determine the balance in Cash for this design service business

Using this formula

Cash balance=Cash Amount invested+Cash Received-Rent- Equipment purchased-Supplies

Let plug in the formula

Cash balance=$7,000+$3,000-$700-$2,000-$850

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Therefore the balance in Cash for this design service business is $6,450

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Answer:$50

Explanation:

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