1. In the decision of whether a firm should issue debt, the Higgins 5-Factor Model suggests to consider the following factor:
Distress costs
Tax benefits
Marketing
Homemade leverage
Financial flexibility
2. For an e-commerce business which is primarily focused on selling clothes, what would be the importance of marketing financials such as sales forecast and expenses forecast?
3. What is the value of a 10-year zero-coupon bond when the market required rate of return is 5% annually? Please show work.