Suppose the average return on asset a is 6.3 percent and the standard deviation is 7.5 percent and the average return and standard deviation on asset b are 3.4 percent and 3.0 percent, respectively. further assume that the returns are normally distributed. use the normdist function in excel® to answer the following questions

a. what is the probability that in any given year, the return on assets a will be greater than 9 percent? less than 0 percent?

b. what is the probability that in any given year, the return on asset b will be greater than 9 percent? less than 0 percent?

c-1 in a particular year, the return on asset a was −4.30 percent. how likely is it that such a low return will recur at some point in the future?

c-2 asset b had a return of 10.10 percent in this same year. how likely is it that such a high return on asset b will recur at some point in the future?

If the demand for a pair of shoes is given by 2p + 5q = 200 and the supply function for it is p − 2q = 10, compare the quantity demanded and the quantity supplied when the price is $90. quantity demanded pairs of shoes quantity supplied pairs of shoes will there be a surplus or shortfall at this price? there will be a surplus. there will be a shortfall.

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity.calculate the cost of new stock using the dividend growth approach.what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics.each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings.equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g

Best burger is a major fast food chain. its managers are motivated to grow the firm in order to increase their market power and change the industry structure in their favor. which of the following strategies is most associated with their motive for growth? a. employing celebrity spokespeople b. implementing automated burger-making machinery c. purchasing competitors d. increasing executive salaries