Afirm has determined its optimal structure which is composed of the following sources and target market value proportions.
target market source of capital proportions
long-term debt 60%
common stock equity 40
debt: the firm can sell a 15-year, $1,000 par value, 8 percent bond for $1,050. a flotation cost of 2 percent of the face value would be required in addition to the premium of $50.
common stock: a firm's common stock is currently selling for $75 per share. the dividend expected to be paid at the end of the coming year is $5. its dividend payments have been growing at a constant rate for the last five years. five years ago, the dividend was $3.10. it is expected that to sell, a new common stock issue must be underpriced $2 per share and the firm must pay $1 per share in flotation costs. additionally, the firm has a marginal tax rate of 40 percent.
18) the firm's cost of retained earnings is (see table 9.2) a) 18.9 percent b) 15.0 percent c) 10.2 percent d) 14.3 percent
19) the weighted average cost of capital up to the point when retained earnings are exhausted is (see table 9.2) a) 7.7 percent b) 11.29 percent c) 8.7 percent d) 6.8 percent
20) assuming the firm plans to pay out all of its earnings as dividends, the weighted average cost of capital is (see table 9.2) a) 12.1 percent b) 10.44 percent c) 8.9 percent d) 11.6 percent

What impact did the economic opportunities in pennsylvania and new york have on virginia? a. virginia planters started to migrate to new york. b. new yorkers began buying up cheap virginia real estate. c. virginians found themselves resorting increasingly to slavery. d. virginians loosened their slave laws to attract more migrants.

Daniel owns 100 shares of abc corporation's common stock. abc uses the fair value option, and recent declines in the firm's credit rating have caused the value of the firm's outstanding bonds payable to drop by 10%. daniel feels this is good news, but he wants to know what you think about the situation. which of the following represents your best response? a : "this situation may be positive for you in that the change in abc's credit standing indicates that the value of the firm's assets is likely increasing. however, the drop in bond value may negate any positive effects on your bottom line, because it means your claim on the firm's assets is simultaneously decreasing." b : "actually, this is bad news all around. the drop in the value of abc's bonds payable means shareholders' claims on the firm's assets have decreased. moreover, abc's declining credit rating means that the firm's assets are probably also dropping in value, thus magnifying your losses even more." c : "on the surface, this seems like good news because it means your claim on the firm's assets has increased. however, the drop in creditworthiness may also indicate that abc's assets are declining in value, thus offsetting any gains associated with the drop in bonds payable." d : "you're right! this is good news because it means that abc's debtholders have a decreased claim on the firm's assets. as a result, the firm's existing shareholders"like you"have seen their claim on the firm's assets increase."

When using various forms of promotion to carry the promotion message, it is important that the recipients of the message interpret it in the same way. creating a unified promotional message, where potential customers perceive the same message, whether it is in a tv commercial, or on a billboard, or in a blog, is called