Lara's Inc. Is currently an unlevered firm with 450,000 shares of stock outstanding, with a market price of $15 a share. The company has earnings before interest and taxes of $314,000. Lara's met with his bankers, Warne Incorporated and agreed to borrow $825,000, at 5 percent. You are an ardent investor and you currently own 20,000 shares of Lara's stock. If you seek to unlevered your position; how many shares of Lara's stock will you continue to own, if you can loan out funds at 5 percent interest? Ignore taxes in your deliberations. Kindly show all workings.

Step-by-step explanation:

Value of firm = Number of shares×Market price per share

= 450,000 × $15

= $6,750,000

Value of debt = $825,000

Weight of debt = $825,000 / $6,750,000 = 12.22%

Number of shares continue to own = 20,000 × (1 - 12.22%) = 17,555.56 or 17,556 shares

Number of shares continue to own = 17,555.56 or 17,556 shares

3.4 pizzas

step-by-step explanation:

given is a scatter plot showing number of pizzas sold during weeks for different issues of coupon

y represents number of pizzas sold and x number of coupons issued

y is marked verticaly and x horizontally

the trend line is given as

y =3.4x+43

this says that even when no coupon is issued pizzas sold will be 43

and rate of change of pizza sold for 1 unit of coupon = slope = 3.4

i.e. when x increases by 1 unit y increases by 3.4 units

hence for each additional coupon issued 3.4 pizzas more will be sold

michael scott & dwight schrute

step-by-step explanation:

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