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1. Determining Portfolio Weights: What are the portfolio weights for a portfolio that has 85 shares of Stock A that sell for $38 per share and 160 shares of Stock B that sell for $27 per share?
2. Portfolio Expected Return: You own a portfolio that has $3,400 invested in Stock A and $4,100 invested in Stock B. If the expected returns on these stocks are 9.5 percent and 15.2 percent, respectively, what is the expected return on the portfolio?
12. Using CAPM: A stock has a beta of 1.25, the expected return on the market is 11 .5 percent, and the risk-free rate is 3.4 percent. What must the expected return on this stock be?
Calculating cost of equity: The Dybvig Corporation's common stock has a beta of 1.15. If the risk-free rate is 4.5 percent and the expected return on the market is 11 percent, what is Dybvig's cost of equity capital?
7. Calculating WACC: Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 15 percent, and the cost of debt is 8 percent. The relevant tax rate is 35 percent. What is Mullineaux's WACC?