Consider the multifactor model APT with two factors. Portfolio A has a beta of 1.20 on factor 1 and a beta of 1.50 on factor 2. The risk premiums on the factor-1 and factor-2 portfolios are 1% and 7%, respectively. The risk-free rate of return is 4%. The expected return on portfolio A is if no arbitrage opportunities exist.

Aggart technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. the stock issue would have no effect on total assets, the interest rate taggart pays, ebit, or the tax rate. which of the following is likely to occur if the company goes ahead with the stock issue? a. the roa will decline. b. taxable income will decline. c. the tax bill will increase. d. net income will decrease. e. the times-interest-earned ratio will decrease