1. How does increase in dividend payout ratio give rise to decrease in transaction cost associated with issuing equity? Please keep the answer simple and comprehensible.
2. Construct a loan amortization schedule for a 30-year, 8.65% loan of $15,000,000. The loan requires equal, end-of-year payments, and interest is compounded monthly. What is the total amount of interest paid over the life of the loan?
3. Is the U.S. stock market efficient? Also, discuss the behavior challenge to market efficiency.