1. Estimate Free cash flow for next 5 years assuming depreciation of 5% of sales and capital expenditures of 4% of Sales.
2. "Immediately after a coupon payment it is true that if the yield is greater than the coupon rate then the price is less than the par value. But between coupon payment dates, this statement may not be correct." Is this true? Explain.
3. Which of the following options would you choose to have if the rate of discount is 20 percent?
- $300 in one year
- $350 in two years
- $420 in three years
- $1500 in ten years