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1. Historical rates of return for the market and for Stock A are given below...

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1. Historical rates of return for the market and for Stock A are given below Year Market Stock A 6.0% -8.0 8.0 18.0 8.0% 3.0 -2.0 12.0 3 The historical beta of Stock A is: a. 0.6000. b. 0.6572. c. 0.7256. d. 0.7793. e. 0.4534 Use the following data to answer questions 22-24. Old Air, Inc. has been operating for several years. Its market-determined beta is 2.0, market-value capital structure is 50% debt, and tax rate is 50%. The risk-free rate is 10% and the required return on the market is 15%, 22. Old Air's unlevered (all-equity, business, or asset) beta is: a. 0.67. b. 1.00 c. 1.33. d. 1 67 e 2.00 23. Old Air's business risk premium is: a. 0.00%. b. 1.50%. C. 3.33%. d, 667%, e. 7.50%. 24. Oid Air's financial risk premium is a. 0.00%. b. 1.50%. e 3.33% d, 667%

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