Consider a market with two firms, kellogg and post, that sell breakfast cereals. both companies must choose whether to charge a high price ($4.004.00) or a low price ($3.503.50) for their cereals. these price strategies, with corresponding profits, are depicted in the payoff matrix to the right. kellogg's profits are in red and post's are in blue. what is the cooperative equilibrium for this game?

Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.