Schalheim sisters inc. has always paid out all of its earnings as dividends, hence the firm has no retained earnings. this same situation is expected to persist in the future. the company uses the capm to calculate its cost of equity, its target capital structure consists of common stock, preferred stock, and debt. which of the following events would reduce its wacc?

a. the market risk premium declines.

b. the company’s beta increases.

c. the flotation costs associated with issuing new common stock increase.

d. expected inflation increases.

e. the flotation costs associated with issuing preferred stock increase.

Kara was out jogging and, despite being tired, decided to run one more mile. based on her actions, economists would conclude that kara:

Alandlord rented an art studio to an artist. under the terms of the signed, written, two-year lease, the artist agreed to pay the landlord $1,000 per month and to assume responsibility for all necessary repairs. after the first year of the lease, the artist assigned the balance of his lease to a sculptor. the landlord approved the sculptor as a tenant and accepted two rent payments from her, and then the landlord sold the building to an investor. the sculptor had made two payments to the investor when an electrical fire broke out in the studio, injuring the sculptor. the fire was caused by faulty wiring. the landlord was aware that there was a dangerous wiring problem when he leased the property to the artist. but when the landlord discovered how costly repairs would be, he decided it would be more profitable to sell the property than to repair it. the problem was not easily discoverable by anyone other than an expert electrician, and the landlord did not tell the artist, the sculptor, or the investor about the problem. the sculptor sues to recover damages for her injuries. from whom can the sculptor recover?

Which of the following is an example of search costs? a.) driving to a faraway place to find available goods b.) buying goods in some special way that is outside the normal channels c.) paying a premium cost for goods d.) selling extra goods for a discount price