You have a portfolio that is 39 percent invested in Stock R,…

You have a portfolio that is 39 percent invested in Stock R, 40 percent invested in Stock S, with the remainder in Stock T. The expected returns of these stocks are 15.8 percent, 12.8 percent, and 16.4 percent, respectively. What is the expected return on the portfolio?

Piedmont Hotels is an all-equity company. Its stock has a be…

Piedmont Hotels is an all-equity company. Its stock has a beta of 0.92. The market risk premium is 7.7 percent and the risk-free rate is 3.5 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 2.7 percent to the project’s discount rate. What should the firm set as the required rate of return for the project?