The common stock and debt of northern sludge are valued at $50 million and $30 million, respectively. investors currently require a 16% return on the firm’s common stock and 8% on its debt. if northern sludge issues an additional $10 million of common stock and uses this money to retire (i. e., to pay back) debt, what is the expected return on its common stock? assume first that the change in capital structure does not affect the risk of the debt. suppose next that the change in capital structure increased the risk of the debt. would your previous answer then under- or overstate the effect on the expected return on the firm’s common stock? assume throughout that the mm assumptions hold (i. e., no taxes, no costs of financial distress).

For each of the following cases determine the ending balance in the inventory account. (hint: first, determine the total cost of inventory available for sale. next, subtract the cost of the inventory sold to arrive at the ending balance.)a. jill’s dress shop had a beginning balance in its inventory account of $40,000. during the accounting period jill’s purchased $75,000 of inventory, returned $5,000 of inventory, and obtained $750 of purchases discounts. jill’s incurred $1,000 of transportation-in cost and $600 of transportation-out cost. salaries of sales personnel amounted to $31,000. administrative expenses amounted to $35,600. cost of goods sold amounted to $82,300.b. ken’s bait shop had a beginning balance in its inventory account of $8,000. during the accounting period ken’s purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. sales discounts amounted to $640. ken’s incurred $900 of transportation-in cost and $260 of transportation-out cost. selling and administrative cost amounted to $12,300. cost of goods sold amounted to $33,900.a& b. cost of goods avaliable for sale? ending inventory?