A particular firms shareholders demand a 15 percent return ontheir investment gi

A particular firms shareholders demand a 15 percent return ontheir investment given the firms risk. However this firm hashistorically generated returns in excess of shareholderexpectations with an average return on its portfolio ofinvestments of 25 percent. a. Looking back what kind ofstock-price performance would you expect to see for this firm? b. Anew investment opportunity arises and the firms financialanalysts estimate that the projects return will be 18 percent. TheCEO wants to reject the project because it would lower the firmsaverage return and therefore lower the firms stock price. How doyou respond?