1) The required rate of return for Firm A is

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a 8%.

b 12%.

c 16%.

d Cannot be determined with information given.

2) Firm A's risk premium is

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a 4%.

b 6%.

c 8%.

d 10%.

3) Treize Industries' common stock has an expected return of 13% and a beta of 1.3. If the expected risk-free return is 3%, what is the expected return for the market (round your answer to the nearest .1%)?

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a 7.7%

b 9.6%

c 10.0%

d 10.7%