Case examination #2(FINA-4740-91) Questions aboutDeluxe Corporation: Using Hudson Bancorp's estimates of the costs of debt in Exhibit 8 and the information provided in Exhibit 6, calculate the cost of debt for Deluxe at the following debt/capital ratios: 10%, 40%, 45%, 50%,60%,and 80%.(10marks) Using the information provided in Exhibits 1, 2, 3, and 9,calculate the costs of equity at the following debt/capital ratios (EMRP=5.4%): 10%, 40%, 45%, 50%,60%,and 80%.Estimated the firm's weighted average costs of capital at the following debt/capital ratios: 10%, 40%, 45%, 50%,60%,and 80%.(10marks) What are management's motivations and key objectives in setting the firm's financial policy?Do you think Deluxe Corporation's current level of debt is appropriate?(10marks)  Questions aboutDividend policy at Linear Technology: Based on the information provided in the case, calculate the dividend payout ratios and dividend yields each yearfrom 1993 to 2003 for Linear Technology. Briefly describe the firm's payout policy.How is its payout policy related to its debt policy?(10 marks) If Linear were to pay out its entire cash balance as a special dividend in 2002, what would be the effect on the share price? On earnings per share? What if Linear repurchased shares instead? (Assume a 3% rate of interest) (10marks) In some years (particularly recent years), Linear allocated substantially more cash to share repurchases than to dividends.Describe the factors that must be considered when determining a firm's dividendpayout policy.(10marks)