If the market return is expected to be 1260 percent and the


1. Hastings Entertainment has a beta of 0.49. If the market return is expected to be 12.60 percent and the risk-free rate is 6.60 percent, what is Hastings’ required return? (Round your answer to 2 decimal places.)

2. Below are the financial date for Brownstone Inc. and Silverton Corp.

Total Earnings Brownstone $500,000 Silverton $600,000

Number of outstanding shares Brownstone $200,000 Silverton $300,000

Earnings per share Brownstone $2.50 Silverton $2.50

If all the shares of Brownstone Inc. are exchanged for SIlverton Corp. opn a share-for-share basis, what will the earnings per share be for Silverton after the merger? Please show work.

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Financial Management: If the market return is expected to be 1260 percent and the
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