If a cost object such as a product or customer has a positive yellow margin, then its: a. Red margin will be positive. b. Red margin may be either positive, negative, or zero. c. Red margin will be negative. d. Red margin will be zero.

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.