needing a breakdown of how to do 1 and 2 by hand.

1) Aerelon Airways, a commercial airline, suffers a major crash. As a result, passengers are considered to be less likely to choose Aerelon as their carrier, and it is expected free cash flows will fall by $15million per year for five years. If Aerelon has 55 million shares outstanding, an equity cost of capital of 10%, and no debt, by how much would Aerelon's shares be expected to fall in price as a result of this accident? 1)_ A) $0.93 B) $1.14 C) $1.34 D$1.03 2) Consider the following expected returns, volatilities, and correlations: Correlation with Microsoft Correlation Expected Standard with Stock Return Deviation Duke Energy Duke Energy 13% 6% 1.0 Microsoft 47% 24% -1.0 Wal-Mart 23% 14% 0.0 Correlation with Wal-Mart 0.0 0.7 1.0 -1.0 1.0 0.7 The expected return of a portfolio that is equally invested in Duke Energy and Microsoft is closest to . 2) A) 45% B) 15% 30% D) 14%