1. What are the risks associated with Deluxe’s business and strategy? What financing requirements do you foresee for Deluxe in the coming years? 2. What are the main objectives of the financial policy that Rajat Singh must recommend to Deluxe Corporation’s board of directors? Evaluate the different options using the FRICTO framework. 3. Drawing on the financial ratios in case Exhibit 6, how much debt could Deluxe borrow and still maintain a BBB rating? Hint: Using the required EBIT interest coverage for each rating and Deluxe’s EBIT, back-out their debt capacity for a given rating. Assume the cost of debt is 6%. 4. Using Hudson Bancorp’s estimates of the costs of debt and equity in case Exhibit 8, which rating category has the lowest overall cost of funds (WACC)? 5. Is Deluxe’s current debt level appropriate? Why or why not? 6. What target debt/equity ratio should Singh recommend? Justify your choice.