II Calculation Questions (30 points) 1. Calculate the beta of firm ABC according to the information below about the returns (We realize that the accuracy of the calculation of beta based on only four-period of data will be low, but let's neglect that here). Explain the meaning of beta according to your calculation. (10 points) Firm ABC's returns 6% 15% -4.2% 9% Market returns 5% 12.5% -35% 7.5% A firm has 30% equity and 70% debt and it pays 10% on its debt and 15% on its equity. Assume the corporate tax rate is 40%. What is the WACC for this firm? (10 points) 2