6 9.09 points Skipped Problem 7-22 (Algo) Required: I am buying a firm with an expected perpetual cash flow of $900 but am unsure of its risk. If I think the beta of the firm is 0, when the beta is really 1, how much more will I offer for the firm than it is truly worth? Assume the risk-free rate is 6% and the expected rate of return on the market is 20%. (Input the amount as a positive value.) Present value difference eBook Print References 7 9.09 points Skipped Problem 7-32 (Algo) Required: Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 4% and IR 7%. A stock with a beta of 1 on IP and 0.5 on IR currently is expected to provide a rate of return of 13%. If industrial production actually grows by 5%, while the inflation rate turns out to be 8%, what is your best guess for the rate of return on the stock? (Round your answer to 1 decimal place.) Rate of return eBook Print References % 00 8 9.09 points Skipped eBook Problem 7-33 (Algo) Suppose there are two independent economic factors, M and M. The risk-free rate is 7%, and all stocks have independent firm- specific components with a standard deviation of 59%. Portfolios A and B are both well diversified. Portfolio A B Beta on M1 Beta on M2 1.7 2.4 2.5 -0.9 Expected Return (%) 38 11 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Required: Print Expected return-beta relationship E(rp) = References % + BP1+ BP2