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dexar [7]
3 years ago
14

The estimated beta for RDG is 0.74. The risk free rate of return is 4 percent and the Equity Risk Premium is 5 percent. What is

the required rate of return for RDG using the CAPM
Business
1 answer:
garri49 [273]3 years ago
3 0

Answer:

7.7%

Explanation:

Given :

Risk free rate of return = 4%

Risk premium = 5%

Estimated beta = 0.7

Using the CAPM relation :

The expected return = Risk free rate + (Risk premium * Estimated Beta)

Expected Return = 4% + (5% * 0.74)

Expected Return = 4% + 3.7%

Expected Return = 7.7%

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Igoryamba
2

Hope this helps

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3 0
3 years ago
Read 2 more answers
Which of the following is a major difference between a budget constraint and production possibilities frontier?
horrorfan [7]

Answer:

c

Explanation:

The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.  

The PPF is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.  

So, the PPF exhibits diminishing return. The slope of the PPF is different at different points. this makes the PPF a curve

the budget constraint is a straight line that shows the various combinations of goods a consumer can consume given her income. the budget constraint is a straight line because the slope is constant at each point on the curve

Also, the slope of the budget constraint is the relative prices of the two goods

8 0
3 years ago
John asked Ted why he failed to show up at the study group session. He found out that Ted had had a really tough day.
Kaylis [27]
The answer should be Perception-Checking

Perception checking is where you check someone's behavior, which is how John found out Ted was having a bad day. (based on Teds behavior)
7 0
2 years ago
Goldie is a manager in a company that manufactures wrought iron furniture. She assesses the performance of the company by determ
Rainbow [258]

Answer: Partial Productivity.

Explanation:

Goldie is making use of partial productivity to evaluate her company's performance. Partial Productivity is a method of calculating productivity by comparing the total output to a fraction of the input.

Partial Productivity =

output / single input

4 0
3 years ago
Michael wong and sanjay patel, both lawyers, start a law firm together. both of them have unlimited liability for the debts of t
UNO [17]

The law firm that Michael Wong and Sanjay Patel started together is an example of general partnership. The general partnership is a way where partners have an arrangement of joining together in one business that will provide them unlimited liability in terms of the obligations in their partnership.

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