Business

Riley Blackburn

2 September, 09:24

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