Using the estimates below, calculate the standard deviation (risk) of a portfolio that is 60% invested in stock A and 40% invested in stock B. Standard deviation on stock A = 9.65% Standard deviation on stock B = 15.65%/Covariance = 0.205%

The market value of XYZ Corporation's common stock is $40 million and the market value of its risk-free debt is $60 million. The beta of the company's common stock is 0.8 and the expected market risk premium is 10 percent. If the Treasury bill rate is 6 percent, what is the firm's cost of capital?

What is the value of the tax shield if the value of the firm is $5 million, its value if unlevered would be $4.78 million, and the present value of bankruptcy and agency costs is $360,000?