Write descriptive notes on the following mini scenarios:

1. Describe three capital structure issues that financial managers must address and explain the effects and significance of these issues.

2. Consider a share of stock that pays a dividend of $1 at the end of one year, $2 at the end of two years, and then dividends grow at a constant rate of 5% per year thereafter. If the required return is 10%, we can value this share of stock by finding P₂ using D₃, then find P₀ = D₁/(1.1) + D₂/(1.1)² + P₂/(1.1)^1. In this formula, it appears as though we ignore all dividends from year three on. Do you agree or disagree and why so?

3. Consider the following statement by a project analyst: "I analyzed my project using scenarios for the base case, best case, and worst case. I computed break-evens and degrees of operating leverage. I did sensitivity analysis and simulation analysis. I computed NPV, IRR, payback, AAR, and PI. In the end, I have over a hundred different estimates and am more confused than ever. I would have been better off just sticking with my first estimate and going by my gut reaction. Critique this statement.