Roflnadal

#1. Are you reading CFAI texts? these questions are pretty much directly answered in the book in reading 22.

#2. The asset Beta is normally lower when incorporating pension assets b/c most pension assets are still funded using traditional risk mgmt techniques which increase the risk of being underfunded. when liabilities are greater than assets, the result is like the firm is borrowing from their pension plan to fund operations. this borrowing is what decreases the asset beta and lowers the WACC.

When pension liabilities are linked with assets the plan stays more properly matched (ie funded) this lessens the risk of the plan, and reduces the amount the firm "borrows" from the plan to fund operations. With a lower amount borrowed the firm has a greater proportion of its capital structure in equity, which increases the WACC.

I think this second part was not as well explained in the reading, but after going through this reading twice now, it's what I have taken away.