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interest rate

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Question

A firm plans to raise $4 million by borrowing at an interest rate of 16% and to raise $1million by issuing

common stock. The firm’s stock has a beta coefficient of 2, the risk free

interest rate is 6%, the average rate of return on stocks is 9%, and the marginal tax rate is

25%. What is the firm’s composite cost of capital? Please provide explanation to the answer

 
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probabilities

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Question

An individual is indifferent between a certain payment of $20 and a game that will pay $50or nothing with

equal probabilities. The individual has a certainty equivalent coefficient of ____?

 
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Your company has a customer who is shutting down a production line

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Question

Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of

the extrusion machine. The company could keep it in inventory for a possible future product and estimates that the reservation value is $250,000. Your dealings on the secondhand market lead you to believe that there is a 0.4 chance a random buyer will pay $300,000, a 0.25 chance the buyer will pay $350,000, a 0.1 chance the buyer will pay $400,000, and a 0.25 chance it will not sell. If you must commit to a posted price, what price maximizes profits and why?

 
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dollar devaluation

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Question

 Please help How will a dollar devaluation affect

businesses and consumers in the twin cities of El Paso, US and Juarez, Mexico?

 Make sure you explain the impact on the twin cities, not just 1 city.

 
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