A company without debt has a WACC of 8%. The firm decides to go into debt at a rate of 5% to the tune of 33.3% (one third) of its value in order to finance a capital reduction of a similar amount. What is the cost of equity now? If the market risk premium is 4% and the β of the shares was 1.2, what is the new β of the shares after capital reduction?

What would not cause duff beer’s production possibilities curve to expand in the short run? a. improved manufacturing technology b. additional resources c. increased demand

Banana computers has decided to procure processing chips required for its laptops from external suppliers instead of manufacturing them in their own facilities. how will this decision affect the firm? a. the firm will be protected against the principal-agent problem. b. the firm's administrative costs will be low because of necessary bureaucracy. c. the firm will have more flexibility in purchasing and comparing prices of goods and services. d. the firm will have high-powered incentives, such as hourly wages and salaries.

Data for hermann corporation are shown below: per unit percent of sales selling price $ 125 100 % variable expenses 80 64 contribution margin $ 45 36 % fixed expenses are $85,000 per month and the company is selling 2,700 units per month. required: 1-a. how much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000 and monthly sales increase by $20,000? 1-b. should the advertising budget be increased?