$1.$ What is the expected return on Asset A if it has a beta of $1\mathrm{.}50,$ the expected market return is $11$ percent, and the risk free rate is $5$ percent?

$2.$ The expected return on Stock Q is $15$ percent, the market risk premium is $6$ percent, and the risk free rate is $5$ percent. Calculate the beta of Stock Q$.$

$3.$ Assume that you have a portfolio consisting of the following stocks.

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Stock Investment $($$$)$ Expected return

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A $$10,0000\mathrm{.}07($or $7\%)$

B $20,0000\mathrm{.}10($or $10\%)$

C $50,0000\mathrm{.}13($or $13\%)$

D $15,0000\mathrm{.}08($or $8\%)$

E $5,0000\mathrm{.}05($or $5\%)$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Compute the expected return on the portfolio.

$4.$ You invest $$300,000$ in Stock X$,$ $$200,000$ in Stock Y$,$ and $$500,000$ in Stock Z$.$

a$)$ The betas for Stocks X$,$ Y$,$ and Z are $0\mathrm{.}90,1\mathrm{.}25,$ and $1\mathrm{.}80,$ respectively. Find the beta of the portfolio.

b$)$ The risk free rate of return is $5$ percent and the return on the market portfolio is $11$ percent. Find the expected return on the portfolio according to the Capital Asset Pricing Model $($CAPM$)?$

$5.$ A firm just paid an annual dividend of $$4$ per share. This dividend is expected to grow at a rate of $6$ percent per year forever. If the current market price for a share of the company$$s stock is $$50,$ find the cost of equity $($or required return on equity.$)$

$6.$ Treasury bills currently have a return of $5$ percent and the return on the S&P $500$ is $11$ percent. If a company has a beta of $1\mathrm{.}30,$ what is its required return on equity $($or cost of equity$)?$

$7.$ Suppose a firm$$s capital structure consists of debt and common equity. The firm has a cost of equity of $14$ percent and a pre$-$tax cost of debt of $8$ percent. If the target debt$/$equity ratio is $0\mathrm{.}60($or $60$ percent$),$ and the tax rate is $25$ percent, what is the firm$$s weighted average cost of capital $($WACC or RWACC$)?$