1 The investor's required rate of return differs from the firm's cost of capital due to the: Answer A firm's beta. B CAPM. C tax deductibility of interest. D time value of money. 2 The weights used to determine the relative importance of the firm's sources of capital should reflect: Answer A subjective adjustments for firm risk. B current market values. C current market values for bonds, common stock, and preferred stock and book values for retained earnings. D book values in accord with generally accepted accounting principles