Aspen company is financed with $50 million of 8% debt and $75 million of common equity. the firm has 1 million shares of common stock outstanding. aspen needs to raise $20 million and is undecided between two possible plans for raising this capital: plan a: equity financing. under this plan, common stock will be sold at $100 per share. plan b: levered financing. under this plan, half of the capital will be raised with equity at $100 per share and half will be raised by selling 12% coupon bonds. at what level of operating income (ebit) will the firm be indifferent between the two plans? assume a 34% marginal tax rate.

Stormie zanzibar owns a bakery in the fictitious country of olombia. each month the government’s market ministry mails her a large list of the regulated price of goods which include products like bread, muffins and flat bread. the list also dictates the types of goods she can sell at the bakery and what she is to charge. because of the regulations placed on these goods, stormie has increased her production of sweets, pies, cakes, croissants and buns and decreased her supply of breads, muffins and flat bread. she has taken these steps because the sweet goods’ prices are not government controlled. stormie zanzibar lives under what type of economy?