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Show details of solutions. You have the following information for the stock of Risky Corp. State of the economy Probability of State Rate of Return Recession Normal Boom o the Econom 0.20 0.60 0.20 i State occurs -8.0% 14.0% 31.0% l. 2. 3. 4. What is the expected return for Risky Corp. stock? What are the variance and standard deviation for Risky Corp. stock? Ifthe beta of Risky Corp. stock is 2.0, the risk-free rate of interest is 4% and the return on the market portfolio is 8%, what is the required return on Risky Corp. stock? Suppose your company needs $20 million to build a new assembly line. Your target capital structure is 25 percent debt and 75 percent equity. The flotation cost for new equity is 6 percent, but the floatation cost for debt is only 2 percent. What is the true cost of building the new assembly line after taking flotation costs into account?