Use the following information to answer questions 3940. You are considering acquiring a firm that you believe can generate ex- pected cash flows of $10,000 a year for ever. However, you recognize that those cash flows are uncertain. Suppose you believe that the beta of the firm is 0.4, the risk-free rate is 5 percent, and the expected mar- ket risk premium is 7 percent. 39. Considering the above information, what discount rate should you use to evaluate the firm? A. 10.8%. B. 8.6%. C. 9.3%. D. 6.5%. E. None of the above. 40. Considering the above information, how much is the firm worth? (Hint: Use zero decimal places for your calcualations). A. $88,205. B. $95,104. C. $128,205. D. $115,308. E. None of the above