2.(40 marks) State whether each of the following statements is True/False. Justify your answer. a) (5 marks) Internal rate of return is the discount rate that balances the sum of present values of cash flows associated with the bond with its face value. b) (5 marks) To find the yield to maturity you must assume that investor is able to reinvest all payoffs from the bond at this same rate. c) (5 marks) In valuing a security, we only need to know what the future cash flows will be. d) (5 marks) The amount a bond actually sells for may be higher or lower than its face value. e) (5 marks) Common stocks that pay no dividends are generally priced lower than dividend paying stocks. f) (5 marks) There is more uncertainty associated with the future returns of common stocks than with the returns of bonds and preferred stock. B) (5 marks) When interest rates go up, the market price of a bond goes up. h) (5 marks) The yield on common stock comes from two sources: the dividend yield and the capital gains yield