Which of the following would likely lead to a higher firm value (shareholder wealth)? (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).

Creating a receivables collection policy that collects credit sales faster (without impacting the magnitude or riskiness)

You have gathered the following information about your firm:

• Current Stock Price (Common) ==> $43
• Forecasted Dividend (D1) ==> $2.82
• Beta ==> 1.1
• YTM on Debt ==> 7.82%
• Coupon Rate on Debt ==> 8.43%
• Treasury Bond Yield ==> 3%
• Growth Rate on Dividends ==> 3%
• Expected Return on the Market ==> 13.91%
• Risk Premium for Stocks over Bonds ==> 3.9%

Based on this, estimate the cost of common stock financing based on the Bond Yield plus Risk Premium approach. Round to 2 decimal places in percentage terms.

Reducing the riskiness of expected cash flows (without impacting the magnitude or timeliness)

Increasing the riskiness of expected cash flows (without impacting the magnitude or timeliness)