Question 1. Compare and contrast the Modigliani and Miller propositions with the Weighted Average Cost of Capital (WACC) approach.
Question 2. According to the textbook author (find reference below), what is a puppeteer? Are puppeteers important to the financial process? Are puppeteers functioning in a good or evil manner? Justify your response.
Question 3. Describe the major capital structure changes that happened to IBM. Which of these structure changes were the most beneficial to the company? What were the major liability categories for IBM, particularly between 2001 and 2003? Substantiate your response.
Question 4. Financial formulas are used to compute the explicit tax-value consequences for different leverage structures. The most widely used formulas are the adjusted present value (APV) and the tax-adjusted weighted average cost of capital (WACC) formulas. Which formula is the best to use under various situations? Provide some examples to justify your response.
Textbook: Welch, I. (2009). Corporate finance: An introduction. Upper Saddle River, NJ: Prentice Hall.
Please cite other references.