2/ A stock will have a loss of 14.7 percent in a recession, a return of 13.4 percent in a normal economy, and a return of 28.1 percent in a boom. There is 22 percent probability of a recession, 25 percent probability of normal economy, and 53 percent probability of boom. What is the standard deviation of the stock's returns?

3/ The Two Dollar Store has a cost of equity of 11.9 percent, the YTM on the company's bonds is 6.2 percent, and the tax rate is 21 percent. If the company's debt-equity ratio is .54, what is the weighted average cost of capital?

4/ Alpha Industries is considering a project with an initial cost of $9.2 million. The project will produce cash inflows of $1.72 million per year for 8 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.97 percent and a cost of equity of 11.51 percent. The debtequity ratio is .72 and the tax rate is 21 percent. What is the net present value of the project?

5/ Based on market values, Gubler's Gym has an equity multiplier of 1.57 times. Shareholders require a return of 11.35 percent on the company's stock and a pretax return of 4.95 percent on the company's debt. The company is evaluating a new project that has the same risk as the company itself. The project will generate annual aftertax cash flows of $299,000 per year for 6 years. The tax rate is 21 percent. What is the most the company would be willing to spend today on the project?