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Homework #4 Cost of Capital 3. (30 points) The current firm value and possible values of the firm at Time 1 are as below. What

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Homework #4 Cost of Capital 3. (30 points) The current firm value and possible values of the firm at Time 1 are as below. What is the expected rate of return for the firm from Time 0 to Time 1? Please show the equation you use. The value of the firm at Time 0 is $10 Probability Firm Value at Rate of Return Time 1 30% $9 40% $10 30% $13

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