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Please answer #3, #4a, and #4b! Show all work! 3. Suppose Ewing Corp. has a beta of 0.75, whereas the beta of Mercer Inc. is
Please answer #3, #4a, and #4b! Show all work!
3. Suppose Ewing Corp. has a beta of 0.75, whereas the beta of Mercer Inc. is 1.12. The risk-free interest rate is 2.5% and the market risk premium is 5.5%. What is the expected return of an equally weighted portfolio of Ewing Corp. and Mercer Inc. according to the Capital Asset Pricing Model (CAPM? (1 point) 4. (2 points) A firm's balance sheet has the following entries: Cash Total assets Common stock (10,000,000 shares outstanding, $2.5 par) Capital in excess of par value Retained earnings $20,000,000 100,000,000 25,000,000 5,000,000 20,000.000 What will be each of these balance sheet entries after a a) S1 a share cash dividend? (1 point) b) 1 percent stock dividend (current market price of the stock is $20 per share)? (1 point)
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