$1)$ Wayfar has $20$m equity shares in issue trading at $260$ cents per share and an $8\%$ bank loan of $$8$m$.$ The corporation tax rate is $30\%.$ The Board are considering issuing more shares in order to pay off the bank loan but are unsure of the impact it will have on the company s WACC. The company s cost of equity is currently $14\%.$ Calculate the new WACC if the Board s proposal goes ahead?

a$)15\mathrm{.}56\%$

b$)16\mathrm{.}72\%$

c$)13\mathrm{.}42\%$

d$)14\mathrm{.}93\%$

$2)$ If the Value of equity is $6500$$$,$ Value of debt is $720$$$.$ Cost of equity and debt are given as $22\mathrm{.}69\%$ and $16\mathrm{.}67\%$ respectively, what is WACC?"

a$)19\mathrm{.}68\%$

b$)21\mathrm{.}59\%$

c$)20\mathrm{.}75\%$

d$)22\mathrm{.}11\%$

$3)$ Bumblebee Corp. has paid the following dividends per share over the last five years. They paid $10$c in the $1$st year, $11$c in the $2$nd year, $12\mathrm{.}5$c in the $3$rd year, $13\mathrm{.}6$c in the $4$th year, $14\mathrm{.}5$c in the $5$th year. Calculate the average annual historical growth rate."

a$)5\mathrm{.}50\%$

b$)8\mathrm{.}70\%$

c$)9\mathrm{.}70\%$

d$)7\mathrm{.}60\%$

$4)$

Chambers has a debt: equity ratio of $1$:$2$ by market values and an equity beta of $0\mathrm{.}9.$ Debt is assumed to be risk free and has a pre$-$tax cost of $2\%$ per annum. The expected return on the market portfolio is $8\%$ and corporation tax is $30\%.$ Chambers wishes to undertake an APV approach for investment appraisal. What is the ungeared cost of equity for Chambers to use in such an evaluation?

a$)6\mathrm{.}00\%$

b$)7\mathrm{.}40\%$

c$)9\mathrm{.}20\%$

d$)9\mathrm{.}29\%$

$5)$ Bioteknica, an all equity agro$-$chemical firm, is about to invest in a diversification in the consumer pharmaceutical industry. Its current equity beta is $0\mathrm{.}8,$ whilst the average equity $\backslash$beta of pharmaceutical firms is $1\mathrm{.}3.$ Gearing in the pharmaceutical industry averages $40\%$ debt, $60\%$ equity. Corporate debt is available at $5\%.$ If Rm $=14\%,$ Rf $=4\%,$ corporation tax rate $=30\%.$ What would the cost of equity to be used as a suitable discount rate for the new investment if Techno were to finance the new project with $30\%$ debt and $70\%$ equity?

a$)15\mathrm{.}6\%$

b$)18\%$

c$)16\mathrm{.}90\%$

d$)13\mathrm{.}45\%$

$6)$ C Co is identical in all operating and risk characteristics to D Co$,$ but their capital structures differ. C Co has $$72$ million equity only whereas D Co has $$36\mathrm{.}2$ million debt, $10$ million shares. The tax rate is $33\%.$ What is the value of D Co s equity per share? Key: Vg$=$Vu$+$TB$"$

a$)$ $$47\mathrm{.}75$

b$)$ $$3\mathrm{.}58$

c$)$ $$4\mathrm{.}77$

d$)$ $$7\mathrm{.}20$