1. Estimating a company's cost of capital requires:
A. Applying a risk estimation model
B. Applying a valuation model
C. Adjustment for the time value of money and intrinsic value
D. Adjustment for the time value of money and risk
2. You own a portfolio that has a total value of $205,000 and it is invested in Stock D with a beta of .88 and Stock E with a beta of 1.37. The beta of your portfolio is equal to the market beta. What is the dollar amount of your investment in Stock D?
a. $25,102.48
b. $50,204.08
c. $43,928.57
d. $37,653.28
e. $154,795.92