Homework Help Please (Business Math)?

[crom]

Hello, I've been struggling with these business math (finance) questions ALL day. If anybody can help me I would TRULY appreciate it. The homework is due tonight and I've been struggling to find the correct solution! Thanks in advance everyone!

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We Do Bankruptcies is a law firm that specializes in providing advice to firms in financial distress. It prospers in recessions when other firms are struggling. Consequently, its beta is negative, ?.4.

a. If the interest rate on Treasury bills is 6% and the expected return on the market portfolio is 16%, what is the expected return on the shares of the law firm according to the CAPM?

b. Suppose you invested 60% of your wealth in the market portfolio and the remainder of your wealth in the shares in the law firm. What would be the beta of your portfolio? (Round your answer to 2 decimal places.)

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You are considering acquiring a firm that you believe can generate expected cash flows of $17,000 a year forever. However, you recognize that those cash flows are uncertain.

a. Suppose you believe that the beta of the firm is 1.1. How much is the firm worth if the risk-free rate is 5% and the expected rate of return on the market portfolio is 8%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. How much is the overvalue of the firm if its beta is actually 1.4? (Do not round intermediate calculations. Round your answer to 2 decimal places.)