Question: Please answer questions 1 through 5 ONLY ! Thank you 1. What are some actions that stockholders can take to ensure that management's and stockholders'

Please answer questions 1 through 5 ONLY ! Thank you

Please answer questions 1 through 5 ONLY ! Thank
1. What are some actions that stockholders can take to ensure that management's and stockholders' interests are aligned? 2. Is an initial public offering an example of a primary or a secondary market transaction? Explain. 3. What's the future value of a 5%, 5-year ordinary annuity that pays $800 each year? If this was an annuity due, what would its future value be? 4. Assume that the risk-free rate is 5.5% and the required return on the market is 12%. What is the required rate of return on a stock with a beta of 2? 5. Tresnan Brothers is expected to pay a $2.05 per share dividend at the end of the year (i.e., D1 = $2.05 ). The dividend is expected to grow at a constant rate of 3% a year. The required rate of return on the stock, T's , is 8%. What is the stock's current value per share? 6. Assume that the risk-free rate increases, but the market risk premium remains constant. What impact would this have on the cost of debt? What impact would it have on the cost of equity? 7. Project X is very risky and has an NPV of $3 million. Project Y is very safe and has an NPV of $ 2.5 million. They are mutually exclusive, and project risk has been properly considered in the NPV analyses. Which project should be chosen? Explain. 8. Terrell Trucking Company is in the process of setting its target capital structure. The CFO believes that the optimal debt-to-capital ratio is somewhere between 20% and 50%, and her staff has compiled the following projections for EPS and the stock price at various debt levels: Debt/Capital Ratio Projected EPS Projected Stock Price 20% $3.10 $34.25 30 3.55 36.00 40 3.70 35.50 50 3.55 34.00 Assuming that the firm uses only debt and common equity, what is Terrell's optimal capital structure? At what debt-to-capital ratio is the company's WACC minimized

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