Question No. 1 Marks 3 What is the relationship between risk and return of an investment? Question No. 2 Marks 3 Why do firms compute weighted average cost of capital? Question No. 3 Marks 5 What (high or low) level of Debt Financing would you suggest for the following firms? Firms paying high taxes Firms paying no taxes Question No. 4 Marks 5 How capital rationing can be a hurdle to choose an optimal level of capital investment? Discuss with reasons.
