Booher Book Stores has a beta of 0.4. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 8%. The market risk premium is 7.5%, and the return on an average stock in the market last year was 13%. What is the estimated cost of common equity using the CAPM?

An automobile assembly line operation has a scheduled mean completion time, μ, of 12 minutes. the standard deviation of completion times is 1.6 minutes. it is claimed that, under new management, the mean completion time has decreased. to test this claim, a random sample of 33 completion times under new management was taken. the sample had a mean of 11.2 minutes. assume that the population is normally distributed. can we support, at the 0.05 level of significance, the claim that the mean completion time has decreased under new management? assume that the standard deviation of completion times has not changed.