It is the final review for mgt431 university of Toronto Mississauga, please help me to answer it thanks!

1. Explain and compare the following theories of capital structure. {14.3 points) i) Agency theory; ii) 5tatic~Tradeoff theory; iii} Pecking~0rder theory. 2. Explain carefully and compare the following approaches to firm and project valuation that were discussed in class: {14.3 points) i) Discounted Cash Flow; ii) Relative Valuation; iii} Contingent Valuation. 3. Suppose you are asked to estimate the impact of a proposed merger of two companies on their potential combined value. The companies are in different {but not completely different} product lines. Suppose you select the CAPM framework to generate your estimate of the merged firm value; how accurate would be your estimate of the risk and value of the merged firm? What potential effects would not be reflected in your estimate, and what procedures would one use to remedy any biases in the estimate? Explain. {14.3 points) 4. What are the implications of agency problems [as in Iensen and Meckling {1976)} to corporate ownership structure, corporate project investment decisions, and corporate financial structure? Explain carefully. {14.3 points} 5. Explain the MM dividend irrelevance argument. Then explain how information problems, taxes, and agency costs make dividend policy relevant. Explain. {14.3 points} 6. Explain the \"real options" approach to valuation of project investments, and the claim that the "naive\" NPV rule which ignores the value of such options leads to adverse investment decisions. In your discussion compare two alternative situations, one where uncertainty involves probability distributions which are independently and identically distributed {i.i.d.} over time, and another where there is substantial resolution of uncertainty over time. You may use numerical examples. {14.3 points) MGT431 Final Examination April 2017 Page 2 of 3