The beta of an mnc acquisition target is 1.38 and last year’s s& p 500 return was at 14.92%, while for dedicated savers, t-bills languished at a very dismal 2.21%. with this information, what is the required rate of return for the mnc if they were to acquire this direct foreign investment? ke = rf+b(rm-rf) where ke= required return on stock rf = risk-free rate of return rm = market return b = beta of stock

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?