ABC Co. and XYZ Co. are identical firms in all respects except for their capital structures. ABC is all-equity financed with $475,000 in stock. XYZ uses both stock and perpetual debt; its stock is worth $237,500 and the interest rate on its debt is 10 percent. Both firms expect EBIT to be $53,000. Ignore taxes. Requried:
a. Rico owns $23,750 worth of XYZ’s stock. What rate of return is he expecting?
b. Suppose Rico invests in ABC Co and uses homemade leverage. Calculate his total cash flow and rate of return.
c. What is the cost of equity for ABC and XYZ?
d. What is the WACC for ABC and XYZ?

Suppose that a worker in agland can produce either 10 units of organic grain or 2 units of incense per year, and a worker in zenland can produce either 5 units of organic grain or 15 units of incense per year. there are 20 workers in agland and 10 workers in zenland. currently the two countries do not trade. agland produces and consumes 100 units of grain and 20 units of incense per year. zenland produces and consumes 50 units of grain and no incense per year. if each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by a. 30 units of grain and 100 units of incense. b. 30 units of grain and 150 units of incense. c. 50 units of grain and 90 units of incense. d. 50 units of grain and 130 units of ince

Which of these is an example of innovation?

If a hotel has 100 rooms, and each room takes 25 minutes to clean, how many housekeepers working 8-hour shifts does the hotel need at 50 percent occupancy?