The market value of Charcoal Corporation's common stock is $20 million, and the market value of its risk-free debt is $5 million. The beta of the company's common stock is 1.25, and the market risk premium is 8%. If the Treasury bill rate is 5%, what is the company's after-tax WACC assuming the marginal tax rate is 30%?

Question 8 options:

	12.3%
	9.10%
	7.70%
	12.7%

Which of the following is/are TRUE? I. The efficient portfolios provide the highest possible return for a given level of risk (i.e., for a given standard deviation). II. On the capital market line (CML), any risk-return combination beyond the Market Portfolio (m) is obtained by borrowing money at risk-free rate and investing the borrowed amount at the tangency portfolio, m (i.e., market portfolio).

Question 17 options:

	I.
	Both I and II.
	Neither I nor II.
	II.

You have the following data on three stocks:

Stock Standard Deviation Beta

A 20% 1.38

B 15% 2.85

C 30% 0.55

If you are a strict risk minimizer, you would choose Stock ____ if it is to be held in isolation and Stock ____ if it is to be held as part of a well-diversified portfolio.

Question 28 options:

	B;B
	C;C
	C;B
	B;C