Which of the following statement is correct? There should be six correct answers

In the dividend growth model, the annual dividend used in the computation must be for year one if you are using today's stock price to compute the return.

An increase in tax rates will increase the cost of debt for a firm.

A preferred stock is valued as an annuity.

The CAPM solves for the rate of return that investors demand for holding a companys common stock according to the degree of diversifiable risk present in the stock.

A firm should never accept the independent projects having NPVs greater than zero.

Net Present Value (NPV) is the change in firm value if project is under taken.

All mutually exclusive projects with NPVs less than or equal to zero should be accepted because all such projects will add to the value to the firm.

The main criticisms of the net present value are that cash flows after the payback period are ignored and the time value of money is not considered.

During the the 2008 and 2009 Financial Crisis, well known and large companies found easy access to the commercial paper market for funding and issued substantial amounts of new paper to refinance maturing issues.

Commercial paper is a long-term, secured debt instrument issued by a small corporation or financial institution.

A promissory note is a legal document the borrower signs indicating agreement to the terms of a loan.

Effective interest rate is the interest rate advertised by the lender.

The Financial Crisis in 2008 has taught us that the correlation of returns of a domestic security and a foreign security is lower than we originally thought.

The price of buying or selling a currency is its exchange rate.

The international Fisher effect states that changes in the GDP growth rates for two countries will be offset by equal changes in the same direction.

A country in the NAFTA can no longer create its own money, as it was used to doing when the individual national central banks would use open market operations to increase or decrease the supply of their national currencies.

The cost of debt (RD) is the dividend payments on new common equity.

Increase in the yield to maturity of the firm's outstanding debt will decrease the aftertax cost of debt for a firm, all else constant.

Firms raise capital by borrowing it by issuing bonds to investors or promissory notes to the federal government, or by issuing preferred or common stock to the state and municipal governments.

Interest expense reduces a firm's tax liability and therefore this reduction in taxes reduces the cost of debt.

Exchange rates are fixed and cannot fluctuate every day due to changing world conditions.

International diversification could be beneficial because if the economy or market is weak in one country, it may be stronger in another.

A hedge is a political agreement used to increase foreign exchange risk.

The Financial Crisis in 2008 has taught us that the correlation of returns of a domestic security and a foreign security is lower than we originally thought.