Name: ID: A en has a2-stock portfolio with a total value of s100,000. $75,000 is invested in Stock A with a 1 12S and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio's beta? beta of 0.75 the a. b. 0.92 c. 0.99 d. 0.81 39. Porter Inc's stock has an expected return of 1 1.00% a beta of 1.25, and is in equilibrium. I f the risk-free rate is 2.00%, what is the market risk premium? a. 7.20% b. 6.98% . 9.00% d. 6.26% 40. Taggart Inc. is c onsidering a project that has the following cash flow data. What is the project's payback? Year 0 2 Cash flows $1,150 $500 $500 $500 a. 2.62 years b. 2.44 years c. 1.93 years d. 2.30 years 41. Which of the following statements is CORRECT? The WACC as used in capital budgeting is an estimate of the cost of all the capital a company has raised to acquire its assets. There is an "opportunity cost" associated with using retained earnings, hence they are not "free." a. b. The percentage flotation cost associated with issuing new common equity is typically smaller than the flotation cost for new debt. The WACC as used in capital budgeting would be simply the after-tax cost of debt if the firm plans to use only debt to finance its capital budget during the coming year. c. d. 42. If D 1 = $1.25, g (which is constant) = 5.5%, and P0-S35, what is the stock's expected total return fo coming year? a. 9.07% b. 9.25% c. 8.62% d. 8.71%