1. Volbeat Corporation has bonds on the market with 13 years to maturity, a YTM of 9.9 percent, a par value of $1,000, and a current price of $950. The bonds make semiannual payments. What must the coupon rate be on the bonds?
2. Discuss information risk and give example on how an audit can result in substantial saving in the entity?
3. In general terms, how would a change in investment opportunities affect the payout ratio under the residual dividend model?