$($i$)$ Explain why it is useful to distinguish between diversifiable $($unsystematic or unique$)$ and non$-$diversifiable $($systematic$,$ market$)$ risk.

$($ii$)$ Explain why some of the components of the cost of equity might be hard to measure.

$($iii$)$ Explain why, for a risk averse manager, the certainty equivalent cash flow will be less than the expected cash flow.

$($iv$)$ Explain how sensitivity analysis for a single variable in a Net Present Value analysis may be performed and reported to help senior management make the decision.

$($v$)$ Explain which variables influence the current market price of a bond.

$($vi$)$ Consider a newly issued $3-$year bond with an annual coupon of $10$ and a face value $($par value$)$ of $130.$ Write down an expression for the maximum issue price that could be set if the yield to maturity on this kind of bond is $4\%.$

$5.$ Answer ALL parts of this question.

Explain, and discuss the following methods of valuing companies.

$($i$)$ Projected cash flows

$($ii$)$ Net Asset Value

$($iv$)$ Price$-$Earnings ratios

$($v$)$ Dividend Growth Model