Question: 1. In doing financial analysis, why is the relationship between the ROIC (Return on Invested Capital) and the WACC (Weighted Average Cost of Capital) so

1. In doing financial analysis, why is the relationship between the ROIC (Return on Invested Capital) and the WACC (Weighted Average Cost of Capital) so crucial? Why?

2. Carefully explain the inverse relationship between coupon bond prices and the market rate of interest.

3. Carefully explain that in the capital budgeting process analyzing if potential projects are going to increase value to the firm.

4. Carefully explain the following statement: "Preferred stock is a hybrid security."

5. What are agency conflicts? What groups can have agency conflicts?

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