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.
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%
