Answer ALL the following questions Question 1 (16 marks) HBS Corporation has no debt and is considering the following projects: Project 1 2 3 4 Beta 0.75 0.80 1.05 1.45 IRR 6.4% 10.2% 13.1% 11.5% The expected returns on T-bill and the market are 1.5% and 12% respectively. The WACC of the firm is 10.5%. (a) Which project(s) offers a higher expected return than the firm's cost of capital? (2 marks) (b) Which projects should be accepted? Explain. (8 marks) (c) What would happen if the WACC of the firm were used as a required return of all the projects? Explain. (6 marks)