1. Discuss how macro events such as a recession or excessive growth might affect each element of the DCF formula. How would each (recession or rapid expansion) affect bond prices and bond yields? According to the class notes, there are several problems with business cycle valuations. What are they? Which firms are more likely to be affected by a global recession? How does the valuation of a firm doing business in Germany and the U.S. differ from a firm only doing business in the U.S. How are risk premiums and the risk-free rate affected by the country source of revenues?