1. (10 pts) Compute the expected return and the beta (B) of the following portfolio: Security Number of Price per share Asset B Expected return shares in coefficient on security portfolio A 200 $12 1.0 10% B 100 24 2.0 15% 2. (10 pts) The ZYX Corporation has the following capital components and costs. Calculate ZYX's WACC. Component Market Value Book Value Cost Debt $ 23,625 $32,219 12.0% Preferred Stock $ 4,350 $8,210 13.5% Common Equity $ 52,275 $55,012 19.2% Aztec has a 35% marginal tax rate. 3. Acme paid a $2-per-share dividend yesterday. Its dividends are expected to grow at 1% indefinitely. a. (5 pts) If the appropriate discount rate for Acme's stock is 12%, what is your estimate of its current price one year from now (P1)? b. (5 pts) What is your estimate of the stock price two years from now (P2)? Table below to be used with problem #4 below Variable Value Explanation Dividend 2% Over first two years, and growth 1% Indefinitely afterwards estimate Current $1.00 Dividend declared on 4/19/22 - to be dividend paid to shareholders on record as of 4/28/22 Beta 2.0 Current estimate coefficient Expected 12.0% Historical arithmetic average market annual) return on the S&P 500 return Index RFR 5.0% 10 year Treasury bond yield 4. (10 pts) Using the table above, what is the maximum that an investor should be willing to pay for the share of common stock