Constant interest coverage policy

Reference no: EM13749510

Question 1: What is a constant interest coverage policy and how does it impact the levered value of a project?

Question 2: Why should issuance costs and mispricing costs be included in the assessment of the project's value? How do you include them?

Question 3: Why is it important to calculate the value of the interest tax shield if a firm adjusts its debt annually to a target level?

Question 4: For what reasons would a firm use a financial model in projecting future cash flows from an investment, and what are the primary factors to consider when making the cash flow estimates?

Reference no: EM13749510

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