What is a single discount rate and how does it apply to chain discounts?

Single discount rates are one off discounts which are given by seller on certain products with certain conditions which most be met for it to apply such conditions can be for buyers who pay in cash, buyers who buy in bulks e.g buy 10 get one free, or for every 5 bought you get a 5% discount e.t.c.

This is related to chain discount because its also a series of discount which is allowed for list price of products or services.

required rate of return = 0.166 = 16.6%

step-by-step explanation:

under the capital asset pricing model (capm), the required or expected rate of return for a particular security or asset is given using the formula:

required rate of return = risk-free rate + beta*(market risk premium)

we are given that;

risk-free rate = 4% = 0.04

beta = 1.4

market risk premium = 9% = 0.09

we simply plug these values into the above formula;

required rate of return = 0.04 + 1.4*(0.09)

required rate of return = 0.04 + 0.126

required rate of return = 0.166 = 16.6%