$1.$ Expected return on two stocks for two particular market returns:

Market Return Aggressive Stock Defensive Stock

$4\%-2\%6\%$

$20\%22\%12\%$

a$.$ What are the betas of the two stocks?

b$.$ What is the expected rate of return on each stock if the market return is $40\%$ likely to be $4\%$ and $60\%$ likely to be $20\%?$

c$.$ If the T$-$bill rate is $2\mathrm{.}5\%$ and the market return is $40\%$ likely to be $4\%$ and $60\%$ likely to be $20\%?,$ draw the SML for this economy.

d$.$ Which stock is undervalued and which stock is overvalued? Why?

$2.$ Please determine the WACC $($weighted average cost of capital$)$ for the company with following assumptions: The company maintains a debt$-$to$-$equity ratio equal to $3.$ The marginal tax rate is $35\%.$ The company$$s current bonds have a yield to maturity of about $6\mathrm{.}00\%.$ The current $10-$year Treasury notes have a yield to maturity of $2\%$ and the forecast for the S&P $500$ market return of $11\mathrm{.}00\%.$ The company$$s overall beta is $1\mathrm{.}20.*$Include Excel file with all working$*$