The risk-free rate of interest, kRF, is 6 percent. The overall stock market has an expected return of 12 percent. Nutshell, Inc. has a beta of 1.2. What is the required return of Nutshell, Inc. stock? *

required return of Nutshell, Inc. stock = 13.2%

Explanation:The Required return also called Hurdle rate is the  minimum return in percentage which  an investor should receive  from doing business or investing in a business   to compensate for  the risks associated with the business. The more risky the investment, the more  high returns and the  less risky investment, the lower the returns.

Required Rate of Return = Risk Free Rate + Beta x (Whole Market Return – Risk Free Rate)

given

risk-free rate = 6%

market return= 12 %

beta = 1.2

Required Rate of Return = Risk Free Rate + Beta * (Whole Market Return – Risk Free Rate

= 6% + 1.2 x (12% - 6%) = 6% + 1.2 x 6% = 0.06 + 1.2x 0.06= 0.06 + 0.072=0.132  x 100 = 13.2% 

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; i believe the correct answer is radioactive decay);