all questions

In the context of the Capital Asset Pricing Model, investors require a risk premium due to: a. The risk of default. b. Exposure to firm-specific risk. c. Exposure to market risk. d. The standard deviation of returns. A firm issues 5% convertible loan notes that are redeemable in 4 years' time at a per- note nominal value of 100. Each loan note could alternatively be converted into 30 ordinary shares in 4 years' time. The cost of debt is 7%. Assuming that the share price in 4 years' time is 4 per share, what is the current market value of a convertible loan note? a. 93.23 b. 108.48 c. 140.00 d. 106.81 The cost of capital is typically HIGHEST for: a. Ordinary shares. b. Preference shares. c. Subordinated debt. d. Senior debt