The common stock and debt of northern sludge are valued at $50 million and $30 million, respectively. investors currently require a 16% return on the firm’s common stock and 8% on its debt. if northern sludge issues an additional $10 million of common stock and uses this money to retire (i. e., to pay back) debt, what is the expected return on its common stock? assume first that the change in capital structure does not affect the risk of the debt. suppose next that the change in capital structure increased the risk of the debt. would your previous answer then under- or overstate the effect on the expected return on the firm’s common stock? assume throughout that the mm assumptions hold (i. e., no taxes, no costs of financial distress).

Gemini inc.'s optimal cash transfer amount, using the baumol model, is $60,000. the firm's fixed cost per cash transfer of marketable securities to cash is $180, and the total cash needed for transactions annually is $960,000. on what opportunity cost of holding cash was this analysis based?

Horace society is planning its annual western fair raceway gala. the gala committee has assembled the following expected costs for the event: dinner (per person) $10 gaming token and program (per person) $2 prize payouts $4,300 tickets and advertising $800 private box suite rental $1,700 lottery licenses $200 the committee members would like to charge $40 per person for the evening’s activities. required: 1. what is the break-even point for the dinner-dance (in terms of the number of persons who must attend)? 2. assume that last year only 200 persons attended the dinner-dance. if the same number attend this year, what price per ticket must be charged in order to break even? 3. refer to the original data ($40 ticket price per person). prepare a cvp graph for the dinner- dance from zero tickets up to 600 tickets sold.

What is a market? a. a system that allows people or companies to buy and sell products and services b. the number of companies willing to manufacture a specific product c. the ability to buy production materials in large quantities and save on costs d. a product's ability to satisfy a consumer