6. The cost of capital is A) the minimum rate of return an investment project must generate in order to pay its financing costs. B) the minimum rate of return an investment project must generate in order to pay its financing costs plus a reasonable profit. C) the maximum rate of return an investment project must generate in order to pay its financing costs. D) the maximum rate of return an investment project must generate in order to pay its financing costs plus a reasonable profit. 7. For most countries and most firms, the domestic country beta A) can be no lower than its world beta. B) is normally much smaller than the world beta. C) is normally much higher than the world beta. D) is exactly equal to the world beta. 8. The firm can borrow at 12.5 percent; firm's target debt to total market value ratio is 3/5. The corporate tax rate is 34 percent, and the risk-free rate is 4 percent, the market risk premium is 9.2 percent and beta is 1.5. What is the weighted average cost of capital? A) 12.07 percent B) 11.87 percent C) 13.33 percent D) 15.45 percent 9. The return and variance of return to a U.S. dollar investor from investing in individual foreign security are given by: A) Ri$ = (1 +R;)(1 + e;) 1 and Var(Ri$) = Var(Ri) B) Ri$ = Ri,+ ej and Var(R$) = Var(Ri) + Var(e;) C) Ri$ = (1 +R;(1 +e;) 1 and Var(Ri$) = Var(Ri) + Varle;) + 2Cov(Ri, e;)+aVar D) none of the options