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1) Raspberry Corporation has 4 million ordinary shares outstanding that are currently priced at $8

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1) Raspberry Corporation has 4 million ordinary shares outstanding that are currently priced at $8.50 each and have a beta of 1.4. The company has 500,000 preference shares trading at $6 each. The market yield on the preference shares is 5% per annum. The company's bonds have a total market value of $6,500,000, have a coupon rate of 4% p.a. and current yield to maturity is 3% per annum. The market risk premium is 6.5% p.a., the risk-free rate is 2% p.a., and the company tax rate is 30%.

What is Raspberry Corporation's WACC?

2) You are considering a number of investments to decide if you should include them in your portfolio. Investment Juno has a beta of 1.27 and Investment Kilo has a beta of 0.63

The risk free rate is currently 0.75% and the market return is 5.5%

a) use the Capital Asset Pricing Model and find the required rate on each investment Juno and Kilo

b) Find the expected return on the portfolio Juno-Kilo if the investments are held in the portfolio with 45% allocated to investment Juno and 55% allocated to investment Kilo