You put $250 of your wealth into Apple stock and $750 into Gap stock.

1. You put $250 of your wealth into Apple stock and $750 into Gap stock. The expected return on Apple stock is 10% while Gap stock’s expected return is 16%. Calculate the expected return on your portfolio.a. 14.5% b. 12.0% c. 11.5% d. 13.0% e. $145.00 f. $120.00 g. $115.00 h. $130.002. Which of the following statements regarding the variance of a project’s expected future payo?s is true?a. Variance cannot equal zero.b. Variance decreases as the possible outcomes become more widely dispersed.c. Variance is equal to the square root of the standard deviation.d. Variance is a measure of the degree of dispersion of a project’s various possible outcomes.3. You’ve invested in The Bomb Factory a newly reopened concert venue in Deep Ellum that has the following period-1 payoff schedule:Prob Payoff.15 $40.20 $50.60 $65.05 $80What is the expected value of the investment’s period-1 payo??a. $50 b. $59 c. $65 d. $704. The Community Beer Co. is planning a $50 million expansion project in Louisiana. The expansion is to be financed by selling $20 million in new debt and $30 million in new common stock. The before-tax required rate of return on debt is 9% and the required rate of return on equity is 14%. If Community is in the 40% percent tax bracket what is Community’s project’s cost of capital?a. 10.56% b. 8.84% c. 14.00% d. 12.00%5. Woodford Reserve Inc. (WR) has $5M in debt outstanding with an annual coupon rate of 12%. Currently yield-to-maturity on these bonds is 14 percent. If WR’s tax rate is 40 percent what is the after-tax cost of debt to WR?a. 12.0% b. 8.4% c. 7.2% d. 5.6%6. Given the following information on 7-Eleven’s capital structure compute the company’s weighted average cost of capital. The firms marginal tax rate is 40%.Type of Percent Percent of Capital Structure Before-Tax Component CostBonds 40% 7.5%Preferred Stock 5% 11%Common Stock 55% 15%a. 13.3%b. 7.1%c. 10.0%d. 10.6%e. none of the above7. AT&T’s stock has a beta of 1.0. If the markets expected return is 12% what is the required return on AT&T’s stock?a. 9%b. 10%c. 12%d. insucient information is provided8. Which of the following has a beta of one?a. a risk-free assetb. the marketc. all assets have a beta greater than oned. all assets have a beta less than one9. Cinemark Inc. stocks expected return is 9%. The expected return on the market is 5% and the risk-free rate of return is expected to be 2%. Calculate the risk premium for Cinemarks stock.a. 4%b. 5%c. 7%d. 9%e. 2%