1. Stock R has a beta of 2.4, Stock S has a beta of 0.55, the required return on an average stock is 10%, and the risk-free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. %

2. Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 12.25%; rRF = 3.15%; rM = 8%. Round your answer to two decimal places.

3. The Warner Company has $425,000 in current assets, $632,000 in long-term assets after depreciation, $184,000 in current liabilities, $33,000 in total liabilities and $2,500,000 in equity. The business have met their short term goals and commitments and are able to fund long term assets with the companies long term liabilities.