Question 4: The risk-free rate is the minimum return investors would expect to earn from an investment with no risk. The market risk premium is the additional return investors expect from holding a risky portfolio compared to a risk-free asset. The cost of equity is the return required by investors who provide capital to the firm and are exposed to its market risk.The formula for cost of equity is: Cost of equity = Risk-free rate + Beta * (Market risk premium)Given, Risk-free rate = 2.5%Market risk premium = 7.75%Beta = 1.42The cost of equity can be calculated using the above formula:C = 2.5% + 1.42 * 7.75%C = 2.5% + 11.299%C = 13.799%Therefore, the firm's cost of equity is 13.799%.Question 6: Ceteris paribus is a Latin phrase meaning "all other things being equal." It is commonly used in economics to describe a situation where all variables except one are held constant to isolate the effect of that variable on the outcome.When ceteris paribus, the effect of one variable can be measured without interference from other variables. For example, if the price of a good increases while ceteris paribus, then the quantity demanded of that good will decrease. However, if ceteris is not paribus, then the quantity demanded might not decrease due to the influence of other variables.In finance, ceteris paribus can be used to analyze the impact of a change in a variable on a financial metric while holding other variables constant. For instance, ceteris paribus, an increase in the risk-free rate will result in a corresponding increase in the cost of equity.