$1.$Suppose shares in Tweliep Co$.$ have a beta of $0\mathrm{.}80.$ the market risk premium is $8\%,$ and the riskfree rate is $10\%.$ Tweliep's last dividend was $N$$$2,00$ per share, and the dividend is expected to grow at $8\%$ indefinitely. The share currently sells for $N$$$24,00.$ What is Tweliep's cost of equity capital? $(5)$

$2.$ In addition to the information in the previous case, suppose Tweliep has a target debt$/$equity ratio of $50\%.$ Its cost of debt is $14\%$ before taxes. If the tax rate is $30\%,$ what is the WACC? $(5)$

$3.$Suppose, in the previous problem, Tweliep is seeking $N$$$30$ million for a new project. The necessary funds will have to be raised externally. Tweliep's flotation costs for selling debt and equity are $3\%$ and $15\%,$ respectively. What is the true cost of the new project? $(5)$

$4.$Use the table below to calculate the average return over the years $2006-2010$ for ordinary shares and long$-$term government bonds. $(5)$

Table $1.$ Year on year total returns: $2006-2010$

$\backslash$table$[[$Year$,$Ordinary shares,$\backslash$table$[[$Long$-$term$],[$Government$],[$bonds$]],\backslash$table$[[$Money market$],[$index$]],\backslash$table$[[$Consumer$],[$price index$]]],[2006,40,9,5,6,7,9,5,8],[2007,18,9,4,3,10,0,9,0],[2008,-23,4,17,5,12,4,9,5],[2009,33,5,-1,0,9,1,6,3],[2010,18,7,15,3,6,9,3,5]]$

Calculate the standard deviations using information from problem $1.$ Which of the investments was the most volatile over the period? $(10)$