Problem 1 A retiree strongly believe that investing in a non-dividend paying growth firm will eventually cause him to lose all his shares. Explain why and how this happens? Problem 3 High dividend policy is more difficult to manage for a weak firm than a strong firm. Explain in details why? Problem 2 Managers are reluctant to make dividend changes. Why ? Problem 4 The company has the following simplified Balance Sheet \begin{tabular}{lclrr} Asset value & 1250 & & Debt & 500 \\ Total & 1250 & Equity 750 & \\ \hline \end{tabular} The cost of debt is 6% and the cost of equity is 12% Compute the company's WACC