Your firm has $500 million of investor-supplied capital, its return on investors' capital (roic) is 15%, and it currently has no debt in its capital structure (i. e., wd = 0). the cfo is contemplating a recapitalization where it would issue debt at an after-tax cost of 10% and use the proceeds to buy back some of its common stock, such that the percentage of common equity in the capital structure (wc) is 1 - wd. if the company goes ahead with the recapitalization, its operating income, the size of the firm (i. e., total assets), total investor-supplied capital, and tax rate would remain unchanged. which of the following is most likely to occur as a result of the recapitalization? a. the roa would increase. b. the roa would remain unchanged. c. the return on investors' capital would decline. d. the return on investors' capital would increase. e. the roe would increase.

Profits from using currency options and futures. on july 2, the two-month futures rate of the mexican peso contained a 2 percent discount (unannualized). there was a call option on pesos with an exercise price that was equal to the spot rate. there was also a put option on pesos with an exercise price equal to the spot rate. the premium on each of these options was 3 percent of the spot rate at that time. on september 2, the option expired. go to the oanda. com website (or any site that has foreign exchange rate quotations) and determine the direct quote of the mexican peso. you exercised the option on this date if it was feasible to do so. a. what was your net profit per unit if you had purchased the call option? b. what was your net profit per unit if you had purchased the put option? c. what was your net profit per unit if you had purchased a futures contract on july 2 that had a settlement date of september 2? d. what was your net profit per unit if you sold a futures contract on july 2 that had a settlement date of september 2