1. How does a firm’s capital structure affect its value? Be sure to discuss the cost of the two primary types of capital and their impact on valuation.
2. The annual amount of a series of payments to be made at the end of each of the next ten years is $480. What is the present worth of the payments at 8% interest compounded annually?
3. When engaged in international capital budgeting, the analyst must identify the initial amount of capital invested or put at risk.