Question 2 In the following, different parts of the question are independent and not related to each other. Consider a stock of ABC Corporation whose CAPM beta is 1.54. The expected annual return on the market is 12.20% and the annual risk-free rate is 1.5%. Find the annual cost- of-capital for the stock. (a) (b) What should be the beta of a stock if its cost-of-capital is same as the expected return on the market portfolio? Show your workings. Suppose that the cost-of-capital for Stock A and Stock B are is 21.00% and 13.20% respectively. The CAPM betas of Stock A and Stock B are 1.50 and 0.85 respectively. Find the expected return on the market and risk-free rate