PLease answer to the questions and give short expplloonation

Question 1:

Describe the implications of:

a)MM Theory of Capital Structure (no tax assumption)

b)Clientele effect

Question 2:

Explain this statement: Using leverage has both good and bad effects.

Question 3:

Outline the difference between market and diversifiable risk.

Question 4:

Describe the applications of Capital Asset Pricing Model in financial management.

Question 5:

How does business risk differ from financial risk?

Question 6:

Explain why most of the company-spectifc risk can be avoided through proper diversification of one's investment portfolio.

Question 7:

Why is a call provision advantageous to a bond issuer? When would the issuer be likely to exercise the call option?

Question 8:

What is business risk? Describe each of its components.