You are considering acquiring a firm that you believe can generate expected free cash flows of $9,000 a year forever. However, you recognize that those cash flows are uncertain. a. Suppose you believe that the beta of the firm is 0.7 . How much is the firm worth if the risk-free rate is 5% and the expected market risk premium is 9% ? (Do not round the discount rate in your calculation. Round your answer to the nearest cent.) The value of the firm b. By how much will you misvalue the firm if its beta is actually 1 ? (Do not round the discount rate in your calculation. Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as positive value.) By underestimating beta, you would [(Click to select) v the firm by 5 You are considering acquiring a firm that you believe can generate expected free cash flows of recognize that those cash flows are uncertain. a. Suppose you believe that the beta of the firm is 0.7 . How much is the firm worth if the risk-free risk premium is 9% ? (Do not round the discount rate in your calculation. Round your answer to The value of the firm b. By how much will you misvalue the firm if its beta is actually 1? (Do not round the discount rat intermediate calculations. Round your answer to the nearest cent. Enter your answer as posit By underestimating beta, you would (Click to select) undervalue overvalue he firm by $ You are a consultant to a firm evaluating an expansion of its current business. The annual cash flow forecasts (in millions of dollars) for the project are: Based on the behaviour of the firm's stock, you believe that the beta of the firm is 1.3. Assuming that the rate of return avallable on risk-free investments is 3% and that the expected rate of return on the market portfolio is 11%, what is the net present value of the project? (Enter your answers in millions. Round your answer to 2 decimal places. Use minus sign to enter negative answers, if any.) NPV 5 mixion