Q.1 a) What are the distinguishing features of debt as compared to equity b) What are the relevant cash flows for valuing a share of common stock? Q.2. The opportunity cost rate (r) of an investment is the rate of return available on the best alternative investment of similar risk and is used as an important tool in the time value of money analysis. Elaborate. Q.3. Would you rather have a savings account that pays 5 percent interest compounded semiannually or one that pays 5 percent interest compounded monthly? Explain. Q.4. Coupon rate tells you what the bond paid when it was issued, but the yield or yield to maturity tells you how much you will be paid in the future. In the light of this statement, explain the relationship between coupon rate and the yield to maturity. Q.5. What does the historical relation between volatility and return tell us about investors attitude toward risk?