Finance

Please note: question 1 and 2 need to be approximately 250-500 words, and cite at least one reference used in preparing your response.

1.  Debt Levels: 
If a firm went from zero debt to successively higher levels of debt, why would you expect its stock price to first rise, then hit a peak, and then begin to decline?

2.  Preferred Stock:  
Is preferred stock more like bonds or common stock? Explain.

3.  Question 19-5 Tactical Financing Decisions
How does a firm- dividend policy affect each of the following?
a.  the value of its long-term warrants
b. The likelihood that its convertible bonds will be converted
c. The likelihood that its warrants will be exercised

4.  Question 20-1 Tactical Financing Decisions
Define each of the following terms:
a. Going public; new issue market; initial public offering (IPO)
b. Public offering; private placement
c. Venture capitalists; roadshow; spread
d. Securities and Exchange Commission (SEC); registration statement; shelf registration; margin requirements; insiders
e. Prospectus; “red herring” prospectus
f. National Association of Securities Dealers (NASD)
g. Best efforts arrangements; underwritten arrangement
h. Refunding; project financing; securitization; maturity matching