Context: Normative economic statements are economic policy goals and values. There are two broad types: efficiency and equity. We considered dynamic efficiency (optimal rates of economic growth) in Activity 4. Here is a nice resource that elaborates on the idea of equity or economic justice In this exercise, we contrast these, thinking about trade-offs that might exist between the two. Consider the following equity or economic justice statement:

1. Macroeconomic policies that keep interest rates artificially low unfairly deny an adequate return to savings for middle and lower class families struggling to provide for their future.

And now consider the following efficiency statement:

2. Macroeconomic policies that keep interest rates low encourage efficient economic investment in ideas and capital goods that enhance our society's economic future.

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine

Post test question number 9 for entering the job market

Why is accountability important in managing safety