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QUESTION 2 A. In long term debt financing, the term security often comes up. What is security and why is it required? (5marks) B. Define

QUESTION 2

A. In long term debt financing, the term security often comes up. What is security and why is it required?

(5marks)

B. Define the term Beta and is problems. (4marks)

C.Given the following information on Beta calculate the expected returns.

  1. 3
  2. 4

Assume risk free rate of return to 5% and the market return of 10%. (6 marks)

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