Last year, your firm had $30 million in sales, $7 million in cash operating expenses, and $1 million in depreciation. Costs of goods sold for the year amounted to $12 million. The firm has $8 million in bonds with a 6% interest rate. Your firm received $50,000 in dividend income. The firm sold property for a $60,000 capital gain, and sold other long-term assets for an $80,000 capital loss. What was your firm’s tax payment for the year?

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.