1. Explain the major differences between domestic capital budgeting and international capital budgeting?
2. Your boss is interested in knowing the relevance of corporate governance when it comes to selecting companies to be included in this new global fund. What practical advice can you give to your boss? (include theoretical justifications for your advice)
3. At present, 10-year Treasury bonds are yielding 4% while a 10 year corporate bond is yielding 6.8%. If the liquidity-risk premium on the corporate bond is 0.4%, what is the corporate bond’s default-risk premium?