Tapley Dental Supplies Inc. is in a stable, no-growth situation. Its $1,000,000 of debt consists of perpetuities that have a 10% coupon and sell at par. Tapley's EBIT is $500,000, its cost of equity is 15%, it has 100,000 shares outstanding, all earnings are paid out as dividends, and its federal-plus-state tax rate is 40%. Tapley could borrow an additional $500,000 at an interest rate of 13% without having to retire the original debt, and it would use the proceeds to repurchase stock at the current price, not at the new equilibrium price. The increased risk from the additional leverage will raise the cost of equity to 17%. If Tapley does recapitalize, what will be the new stock price

The textbook defines ethics as “the principles of conduct governing an individual or a group,” and specifically as the standards one uses to decide what their conduct should be. to what extent do you believe that what happened at bp (british petrolium) is as much a breakdown in the company’s ethical systems as it is in its safety systems, and how would you defend your conclusion?

Which of the following is the best example of substitution? a. movie producers begin making more comedies because they cost less to make than action films. b. people walk out before the end of a movie because the acting and the plot are terrible. c. people at the movie theater switch from popcorn to candy because popcorn has gotten too expensive. d. more people begin going to matinee movies instead of night movies to save money on the tickets.

P8-4b dropping unfavorable division based on the following analysis of last year's operations of groves, inc., a financial vice president of the company believes that the firm's total net income could be increased by $160,000 if its design division were discontinued. (amounts are given in the thousands of dollars.) required provide answers for each of the following independent situations: a. assuming that total fixed costs and expenses would not be affected by discontinuing the design division, prepare an analysis showing why you agree or disagree with the vice president. b. assume that the discontinuance of the design division will enable the company to avoid 30% of the fixed portion of cost of services and 40% of the fixed operating expenses allocated to the design division. calculate the resulting effect on net income. c. assume that in addition to the cost avoidance in requirement (b), the capacity released by discontinuance of the design division can be used to provide 6,000 new services that would have a variable cost per service of $60 and would require additional fixed costs totaling $68,000. at what unit price must the new service be sold if groves is to increase its total net income by $180,000?