Critical Thinking.
Answer each question separately (indicating 1, 2, 3, 4) APA Style. Use only 1 reference per question with corresponding in-text citation.
How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on a bond. Explain fully using your own words.
Under what two assumptions can we use the dividend growth model presented in this chapter to determine the value of a share of stock? Comment on the reasonableness of these assumptions. Use your own words.
If a project with conventional cash flows has a payback period less than its life, can you definitely state the algebraic sign of the NPV? Why or why not?. Fully explain using your own words.
(Q-12) On the most basic level, if a firm’s WACC is 12 percent, what does this mean? (Answer using your own words)
