This document presents a comprehensive solution to a Business Finance exam, likely for the MBS546 course. It is divided into two parts, with Part A containing multiple-choice questions and Part B offering detailed answers to more complex problems. The solutions cover a range of financial topics, including the concepts of risk and return, capital structure theory and its implications, investment decisions like machine replacement, and the calculation of the cost of equity and Weighted Average Cost of Capital (WACC). The document demonstrates calculations and explanations for each question, providing a thorough understanding of the concepts. The solution includes numerical examples, formulas, and explanations, offering a valuable resource for students studying business finance. The solution addresses topics like capital structure, cost of capital, and investment analysis, which are crucial in finance.
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