3. In December 2016, Boise Cascades stock had a beta of 0.97. The Treasury bill rate at the time was 4.34% percent, and the Treasury bond rate was 7.59% percent. The firm had debt outstanding of 1.586 billion and a market value of equity of 2.616 billion; the corporate marginal tax rate was 36.00%. Use 5.00%as the market risk premium.

a. Estimate the expected return on the stock for a short-term investor in the company.

b. Estimate the expected return on the stock for a long-term investor in the company.

c. Estimate the cost of equity for the company.

d. Estimate the unlevered beta for the company.

e. How much of the risk in the company can be attributed to business risk and how much to financial leverage risk?