1. Do you believe Blaine’s current capital structure and payout policies are appropriate? Why or why not? (For this question, think especially about the combined implications for Blaine of the lessons of Chapters 14, 15, and 16, noting with regard to Chapter 15 that the approximately $200 million in interest-bearing marketable securities that Blaine holds, together with their resultant $16 million or so in taxable interest income (in contrast to interest expense, which would be tax deductible) could be viewed from a Miller and Modigliani perspective as a "negative tax shield.")

There are three factors that can affect the shape of the treasury yield curve (r* t , ip t , and mrp t ) and five factors that can affect the shape of the corporate yield curve (r* t , ip t , mrp t , drp t , and lp t ). the yield curve reflects the aggregation of the impacts from these factors. suppose the real risk-free rate and inflation rate are expected to remain at their current levels throughout the foreseeable future. consider all factors that affect the yield curve. then identify which of the following shapes that the us treasury yield curve can take. check all that apply. a. downward-sloping yield curveb. upward-sloping yield curvec. inverted yield curve