Kazeem Metals Company has a debt ratio of 30%. Interest rate on its debt is 9%. Its unlevered beta is 1.3 and tax rate is 40%. Suppose that the riskfree interest rate is 5% and the required rate of return on the market is 12%. Calculate Kazeem's cost of unlevered equity (i.e. rEU).

Question 14 options: (Options 3 & 5 are incorrect)

1)

16.34

2)

15.89

3)

16.44%

4)

14.21%

5)	None of the above

Which of the following is a type of systematic risk, and how would such a risk impact the beta of a firm involved in a merger? [I] labor strikes in the company [II] currency crisis [III] Bad product decision by the firm's management [IV] A rise in the delinquency rates and home foreclosures in the financial system.

Question 24 options: (Options 2 & 6 are incorrect)

1)	I, II; Negative effect on beta

2)	II, III; Negative effect on beta

3)	III, IV; Positive effect on beta

4)	II, IV; Positive effect on beta

5)	I, III; Positive effect on beta

6)	None of the above answer combinations are correct