Assume that mm's theory holds with taxes. there is no growth, and the $40 of debt is expected to be permanent. assume a 40% corporate tax rate.
a. how much of the firm's value is accounted for by the debt-generated tax shield?
b. how much better off will uf's a shareholder be if the firm borrows $20 more and uses it to repurchase stock? "



step 1:
tax rate - tc =
a. permanent debt - d =
b. additional debt - d =

step 2:

a. tax shield formula =
b. tax shield formula =

benefit to shareholders =

It is estimated that over 100,000 students will apply to the top 30 m. b.a. programs in the united states this year. a. using the concept of net present value and opportunity cost, when is it rational for an individual to pursue an m. b.a. degree. b. what would you expect to happen to the number of applicants if the starting salaries of managers with m. b.a. degrees remained constant but salaries of managers without such degrees decreased by 20 percent

Amanufacturing firm is considering overhauling the existing compensation strategy. currently every front line employee who works on the assembly line earns the same hourly wage. ideally, management would like to institute a new pay system that involves pay-for-performance. which of the following recommendations is both consistent with scientific management's general emphases and generally good advice for management of this firma. the firm should adopt a differential pay system with one pay level for average performance, and a higher level for good performance. b. the firm should adopt a differential pay system, but the firm should modify it from its original design and provide many different levels of pay associated with different performance levels. c. the firm should understand worker psychology and to focus on pay as the key motivator. d. all of the abovee. none of the above

Which of the following scenarios will probably cause prices to drop