Each of the following multiple-choice questions has been allocated 3 marks. 1. Vanity Ltd has a beta of 0.95. The risk-free rate of return is 4 percent and return on the market portfolio is 12 percent. Using the CAPM, what is the required return on this Vanity Ltd shares? A. 11.60% B. 19.40% C. 15.40% D. 8.90% 2. Dublin International Company's marginal tax rate is 30 percent. It can issue 3-year bonds with a coupon rate of 8.5 percent and par value of $100. The bonds can be sold now at a price of $98.20 each. The underwriters will charge $2 per bond in issue costs. Determine the appropriate after- tax cost of debt Dublin International should use in a capital budgeting analysis. A. 7.00% B. 3.85% C. 6.30% D. 5.74% 3. If there is a 20 percent chance we will get a 16 percent return, a 30 percent chance of getting a 14 percent return, a 40 percent chance of getting a 12 percent return, and a 10 percent chance of getting an 8 percent return, what is the expected rate of return? A. 13% B. 12% C. 15% D. 14% 4. A. In analysing a project, how would a financial manager deal with overhead costs? No overhead costs of the firm should be included as part of the project evaluation. Only those overhead costs that are incremental to the project should be included as part of the project evaluation. B. C. Only specific overhead costs such as salaries and rent need to be included in project evaluation, with others such as electricity and water being disregarded. D. All overhead costs of the firm should be included as part of the project evaluation