CAPM and Valuation. You are considering acquiring a firm that you believe can generate expected free cash flows of $$10,000$ a

year forever. However, you recognize that those cash flows are uncertain. $($ LO$3)$

a$.$ Suppose you believe that the beta of the firm is $.4.$ How much is the firm worth if the risk$-$free rate is $5\%$ and the expected

market risk premium is $7\%?$

b$.$ By how much will you misvalue the firm if its beta is actually $.6?$