Gulf Coast Tours currently has a weighted average cost of capital of 12.4 percent based on a combination of debt and equity financing. The firm has no preferred stock. The current debt-equity ratio is .47 and the aftertax cost of debt is 6.1 percent. The company just hired a new president who is considering eliminating all debt financing. All else constant, what will the firm's cost of capital be if the firm switches to an all-equity firm?

Suppose an economist believes that the price level in the economy is directly related to the money supply, or the amount of money circulating in the economy. the economist proposes the following relationship: p=a x m - p=price level - m=money supply - a=a composite of other factors, including real gdp, that change very slowly over time. how might an economist gather empirical data to test the proposed relationship between money and the price level? an economist would persuade the federal reserve to change the money supply to various levels, and observe the resulting changes in the price level. unlike researchers in the hard sciences, economists cannot study complex relationships using data. economists do not usually develop theoretical models of the economy but only analyze summary statistics about the current state of the economy. an economist would look for data on past changes in the money supply, and note the resulting changes in the price level

Astudent finds data on an internet site that contains financial information about selected companies. he plans to analyze the data and use the results to develop a stock investment strategy. what kind of data source is he using? what concerns might you have about drawing conclusions from this data set?

One of the scarce resources that constrain our behavior is time. each of us has only 24 hours in a day, and we must allocate our time in a given day among competing alternatives. how do you go about allocating your time in a given day among competing alternatives? how do you go about weighing the alternatives? once you choose a most important use of time, why do you not spend all your time on that activity? a. as more and more time is spent on one activity, the opportunity cost of that activity in terms of other activities rises. b. as less and less time is spent on one activity, the opportunity cost of that activity in terms of other activities rises. c. as more and more time is spent on one activity, the opportunity cost of that activity in terms of other activities falls. d. b and c only.