Shell and Mobile, due to a turbulence in gasoline prices, must come up with new pricing strategies to stay competitive. For simplicity, let’s assume that both firms can choose between
setting the price at $3/gallon OR $2/gallon. They set their prices at the same time. Because
most Shell and Mobile stations, for some reason, are always next to one another, whoever sets
the lower price will get ALL the customers. If they set the same price the split the customers in
half. Suppose the market demand for a small town, Economiville is given by
P = 6 – 2Q
Where Q is measured by millions of gallons, and consumers in Economiville only have access to
Shell or Mobile. Shell and Mobile have no costs of producing the gas (assume they have a prior
contract with OPEC (organization of petroleum exporting countries) and have already paid for
the gas in stock). This allows us to consider them maximizing their revenue.

Acoase solution to a problem of externality ensures that a socially efficient outcome is to

Nell and kirby are in the process of negotiating their divorce agreement. what should be the tax consequences to nell and kirby if the following, considered individually, became part of the agreement? a. in consideration for her one-half interest in their personal residence, kirby will transfer to nell stock with a value of $200,000 and $50,000 of cash. kirby's cost of the stock was $150,000, and the value of the personal residence is $500,000. they purchased the residence three years ago for $300,000.nell's basis for the stock is $ xkirby's basis in the house is $ xb. nell will receive $1,000 per month for 120 months. if she dies before receiving all 120 payments, the remaining payments will be made to her estate. the payments (qualify, do not qualify) as alimony and are (included in, excluded from) nell's gross income as they are received. c. nell is to have custody of their 12-year-old son, bobby. she is to receive $1,200 per month until bobby (1) dies or (2) attains age 21 (whichever occurs first). after either of these events occurs, nell will receive only $300 per month for the remainder of her life.$ x per month is alimony that is (included in, excluded from) nell's gross income, and the remaining $ x per month is considered (child support, property settlement) and is (nontaxable, taxable) to nell.

Take it all away has a cost of equity of 11.11 percent, a pretax cost of debt of 5.36 percent, and a tax rate of 40 percent. the company's capital structure consists of 67 percent debt on a book value basis, but debt is 33 percent of the company's value on a market value basis. what is the company's wacc