Assume the M&M world with perfect capital markets. Your firm is levered with 40% debt and 60% equity. The firm’s cost of debt is 5% regardless of leverage. Under the current capital structure, the firm’s cost of equity is 15%.1. What is the firm’s current cost of capital (i. e. pre-tax WACC)?A. 18%B. 20%C. 15%D. 11%2. What would be the firm’s cost of capital if the firm were unlevered?A. 18%B. 15%C. 11%D. 20%

Gary becker's controversial the economics of discrimination concludes that price discrimination has no effect on final profits. price discrimination benefits monopolies. labor discrimination in hiring results in more efficient allocations of production. discrimination in hiring practices has no effect on final profits. labor discrimination harms firms that practice it due to increased labor costs. price discrimination harms monopolies, which refutes over two centuries of economic theory.

Which of the following is an effective strategy when interest rates are falling? a. use long-term loans to take advantage of current low rates. b. use short-term loans to take advantage of lower rates when you refinance a loan. c. deposit to a short-term savings instrumentals to take advantage of higher interest rates when they mature. d.select short-term savings instruments to lock in earnings at a current high rates.

Suppose that real interest rates increase across europe. this development will u.s. net capital outflow at all u.s. real interest rates. this causes the loanable funds to because net capital outflow is a component of that curve.