One approach that the government can use limit the right to pollute would be by issuing pollution permits. Without pollution permit, firms aren’t allowed to emit pollutants in the air, water, or soil. Firms are allowed to buy and sell…
The Holyoke Corporation has 120,000 shares outstanding with a current market price of $8.10 per share. The company needs to raise an additional $36,000 to finance new expenditures, and has decided on a rights issue. The issue will allow current…
Price Elasticity for automakers A researcher estimated that the price elasticity of demand for auto mobiles in the united states is -1.2, while the income elasticity of demand is 3.0. Next year, U.S. automakers intend to increase the average price…
A company produces three products. Data concerning the selling prices and unit costs of the three products appear below: A B CSelling price $40 $50 $90Variable Costs 30 40 60Machine Time 4 min 5 min 10 min The fixed costs…
Price elasticity of demand (midpoint method) for cigarettes Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 20%, by how…
The Ottawa Citizen cost $0.10 in 1970 and $0.50 in 1990. The average wage in manufacturing was $3.01 per hour in 1970 and $14.19 in 1990. a) By what percentage did the price of a newspaper rise? b) By what…
The business risk and the optimal capital structure of a firm, the tutor made the following statement: ??The main factors that affect the business risk are the ability to adjust output prices and operating leverage and business risk is the…
Happy Bank starts with $200 in bank capital. It then takes in $800 in deposits. It keeps 12.5 percent of (1/8th) of the deposit in reserve. It uses the rest of the assets to make bank loans. a) Show the…
What are the implications of a change in the return on equity with an increase in debt financing? What is the relationship between business risk, financial risk, and beta (systematic or market risk). Explain how the degree of operating and…
An oil company refines crude oil valued at $62/barrel and sells it to motorists at its retail outlets. The price is $2.90 gallon ($0.77/L). On a per unit basis (e.g., per gallon or per liter), by what percentage has the…
