QUESTION 18 A firm has a beta of 1.4. The market return equals 12 percent and the risk-free rate of return equals 6 percent. The estimated cost of common stock equity is 6 percent 7.2 percent 14.4 percent O 15,6 percent QUESTION 11 If you randomly select stocks and add them to your portfolio, which of the following statements best describes what you should expect? O a. Adding more such stocks will reduce the portfolio's unsystematic, or diversifiable, risk. o b. Adding more such stocks will have no effect on the portfolio's risk. O c. Adding more such stocks will reduce the portfolio's market risk but not its unsystematic risk. o d. Adding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk. Oe. Adding more such stocks will increase the portfolio's expected rate of return. QUESTION 5 Which of the following actions would be likely to shorten the cash conversion cycle? Change the credit terms offered to customers from 1/10 net 50 to 3/10 net 30. Begin to take cash discounts on inventory purchases; the terms are 2/10 net 30. Adopt a new manufacturing process that saves some labor costs but slows down the conversion of raw materials to finished goods from 10 days to 20 days. Change the credit terms offered to customers from 2/10 net 30 to 1/10 net 60. Adopt a new manufacturing process that speeds up the conversion of raw materials to finished goods from 10 days to 20 days