Assignment:
Q1. Give two reasons stockholders might be indifferent between owning the stock of a firm with volatile cash flows and that of a firm with stable cash flows.
Q2. List six reasons risk management might increase the value of a firm.
Q3. Discuss some of the techniques available to reduce risk exposures.
Q4. Explain how the futures markets can be used to reduce interest rate and input price risk.
Provide complete and step by step solution for the question and show calculations and use formulas.