1. Suppose your portfolio consists 30% of debt and 70% equity. Your equity return was 18% for the year, and your debt returned 5%. What is your portfolio return?
2. A capital investment will produce cash flows of $10,000 annually, in arrears, over its 10-year life. This looks like a great investment since the IRR of 14.97% far exceeds the 10.00% required return. To be sure, calculate the NPV.
3. With a beta of 1.75,if the riskfree rate is 5%, the expected return on the market is 12%, when the equilibrium exists, what is the expected return of Stock J?