Question: Describe how you would go about finding the present value of any annuity given the formula for the present value of a perpetuity. Suppose that

  1. Describe how you would go about finding the present value of any annuity given the formula for the present value of a perpetuity.

  2. Suppose that a firm has both fixed-rate and floating-rate debt outstanding. The floating-rate debt is benchmarked to the Federal fund rate. When the Fed lowers the interest rate, how will the firms times-interest-earned change? Explain your answer.

  3. Respond briefly to the following statements: You say stock price equals the present value of future dividends? Thats crazy! All the investors I know are looking for capital gains.

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