(b) Wharncliffe plc is trying to analyse the factors that affect the return shareholders require from its shares. You have the following information: Ordinary shares (par value 1) Reserves Bank loans 7% Bonds 000 3,500 2,303 5,230 4,500 15,533 Current ex-dividend share price: Current ex-interest bond price: Equity beta: Current yield on short-dated treasury bills: Equity risk premium: Corporation tax rate: 4.23 per share 115 per 100 bond 1.34 2% per annum 6.5% per annum 20% per annum Required: Using the above information, calculate the proportions of the company's CAPM-derived cost of equity finance that are determined by the risk-free rate of return, business risk and financial risk. (9 marks) (c) Critically evaluate the following statement: In terms of its ability to meaningfully explain the relationship between the risk of securities and the return they deliver, the CAPM is now redundant" (6 marks)