1. What impact does all of the uncertainty surrounding the fiscal cliff have on capital budgeting? Does that impact the stock price?
2. Should a company have one cost of capital which it applies to all projects under consideration or should there be divisional costs of capital? Don't look this one up - I want you to think about it and tell me what you think.
3. A firm can earn the cost of capital on any cash-inflows by:
A) Selling stock and bonds
B) Buying back the firm's bonds and stock
C) Increasing fixed or variable costs
D) Reducing fixed costs
E) Reducing total variable costs