As a corporate manager you are concerned with what will happ…

As a corporate manager you are concerned with what will happen to the required return to Doughboy Doughnuts equity as market conditions change. Suppose that the R(rf) =4%, the R(m) is 12%, and B(DD) is 1.5. A. Under current conditions what is the required rate of return for your stock? B.  Suppose (only that ) the slope of the SML remains constant, but the risk free rate decreases to 4% (holding the Market Risk Premium constant)  What will happen to the required return? C. Suppose (Only)  that the Slope of the SML increases so that the Return on the Market is now 15%, but the risk free rate remains at 4%  {the MRP is now 11}.  what effect would this have on the stock’s return?  

Find the missing value of X (which is an annuity). I. Your…

Find the missing value of X (which is an annuity). I. Your broker has offered to sell you this investment for $17500, but you did not hear the value of the all of the cashflows. IF you feel you should earn a 15% return, what is the value of the Missing Cash Flow (XX) ?$1000 at the end of year 1$1000 at the end of year 2 $1000 at the end of year 3 2000 at the end of year 4$XX at the end of year 5$XX at the end of year 6 $XX at the end of year 7$4000 at the end of year 8. $4000 at the end of year 9A)If you feel that you should earn a 15% return on your investment, what is the value of the 5th, 6th  and 7th  cashflow?? (It is an annuity).(round the answer to the penny) B)  Check your work!  Return to your cash flows and enter the answer you had in A.   What is the NPV with the full set of cash flows entered?   C.  What is the IRR with the full set of values in your cash flow buttons?   (for partial credit, if needed, type your intermediate steps).