1. Paddy Limited has 2 million shares on issue currently priced at $4.50 each

Paddy Limited has a beta of 0.8

The value of Paddys debt is $3 million with a current yield of 9% p.a

The risk-free rate is 5%, the market risk premium is 8%, and tax rate is 30%

What is Paddys WACC?

2. Capital Structure weights are based on:

a) book valued of a firms debt and equity

b) initial issue values of a firms debt and equity

c) market values of a firms debt and equity

d) face values of a firms debt and equity

3. Which of the statements about equity is correct:

A) Dividends must be paid

B) Dividends are paid before interest

C) Shareholders have a residual claim to income

D) Shareholders have a primary claim to assets