Question: Question 1. (5 marks) Is there any standard or easily identifiable debt equity ratio that will maximise the value of a firm ? Why or

Question 1. (5 marks)

Is there any standard or easily identifiable debt equity ratio that will maximise the value of a firm ? Why or why not ?

Question 2. (5 marks)

In general, what is the formula for the present value of an annuity of C dollars per period at a discount rate of r per period, and what is the difference between an ordinary annuity and a perpetuity type annuity?

Question 3. (5 marks)

Does a loan where interest is compounded monthly but you do not have to make the first loan payment for six months save you money? Explain.

Question 4. (5 marks)

What is difference between the calculation of compounding interest and simple interest?

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