1. What are the advantages of evaluating fund performance based on IRR? Why would an investor prefer to evaluate a fund based on cash-on-cash return?
2. When evaluating a fund based on its cash-on-cash returns, what other considerations should you keep in mind?
3. Kinder Chocolat Inc. has an outstanding issue of perpetual preferred stock with an annual dividend (D1) of $3.25 per share. If the required return on this preferred stock is 5.0%,
At what price should the stock sell?