Question 1: What is a constant interest coverage policy and how does it impact the levered value of a project?
Question 2: Why should issuance costs and mispricing costs be included in the assessment of the project's value? How do you include them?
Question 3: Why is it important to calculate the value of the interest tax shield if a firm adjusts its debt annually to a target level?
Question 4: For what reasons would a firm use a financial model in projecting future cash flows from an investment, and what are the primary factors to consider when making the cash flow estimates?