D Question 7 3 pts You have invested in a $1,000 face (par) value 30 year bond issued by Apple Corporation. The bond has a coupon payment of 6% paid semi-annually. Although the par value of the bond is $1,000, you only had to pay the market value on the date of purchase which was $925. Therefore you will have a return on your investment (or yield to maturity (YTM)) LOWER than the 6% coupon. True - False Question 8 3 pts Management is considering a number of expansion and diversification opportunities in the current budget cycle. Each option requires significant upfront investments before generating positive cash flow. Generally, which of the following strategies is likely to create wealth for the owners (shareholders) over the long run? a. Diversifying into new industries. O b. Maintaining the same dividend year after year O c. Using the maximum amount of debt they can obtain on each project. d. Consistently making investments in capital projects with positive Net Present Value based on the company's cost of capital. O e. All of the above 3 pts Question 9 The Capital Asset Pricing Model (CAPM) is an important method for estimating the expected investment rate of return on an asset. That investment rate of return can be used as the discount rate for calculating the present value of a firm's forecasted future cash flows in order to estimate the value of the company. The CAPM equation includes which of the following elements... a. the Risk Free Rate O b. the Market Risk Premium c, the stock's Beta coefficient (sensitivity to market fluctuations-relative to average risk of a market portfolio) O d. the minimum IRR accepted by management O e. All of the above f. All of the above except d