1. What is the plowback ratio for a firm that has a required return 16%, dividend yield 10% and a return on equity of 20%?
2. Discuss the impact of lease capitalization on various financial variables/ratios and the possible motivations of firms to report leases as operating leases.
3. You want to save (deposit) $7340 per year, starting next year, to make a down payment of $83384 on a vacation home. If you can earn 4.73 percent on your investment, for how many years will you have to make deposits?