29. Procter & Gamble's stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. Using the capital asset pricing model", what is the firm's required rate of return? a. 11.3696 b. 11.65% c. 11.95% d. 12.25% e 12.55% 30. You and a group of investors are planning to make a significant real estate investment in an office park with multiple buildings and tenants. As a "hurdle rate of return the group is seeking to earn a 15% after-tax return on leveraged capital. After a considerable "due diligence" investigation, which includes an in-depth but conservative review of all financial, legal, local market supply and demand conditions and other factors, you have determined that the investment has a Net Present Value of negative $4,205. How should you advise your group of investors? a. Proceed with the investment --hopefully the situation will improve by itself. b. Suggest that either the group finds easy ways to improve returns on the project through rent increases, cost cuts or other means -- or terminates the planned investment. c. Back out of the deal entirely: Despite considerable time spent on conducting a through due diligence, this deal doesn't have any hope of succeeding d Both (a) and (c) have validity. e. Neither (@nor (b) have validity. PART IV. Complete the following problems. Show all work for full credit 1. Nimmy Fallon holds the following portfolio Stock A Investment $150,000 56,250 93,750 75.000 $375.000 Beta 1.40 0.60 1.20 0.80 D Total 2. Calculate the portfolio's beta? [3 points) b. Can we consider "beta" to be a measure of risk- or is it something else? Describe your response (2 points)