Suppose you are living in a dormitory and you share a common kitchen with other people who live on the same floor with you. a) Suppose the dormitory is well designed and there is always ample space and equipment for everyone on your floor to use in the kitchen. Proper cleaning is constantly done as well. What type of a good/service is the kitchen?
b) Now, suppose a problem occurred which caused other kitchens to be unusable on the other floors. This means, everyone living in the dormitory started to use the kitchen on your floor. Kitchen capacity and cleaning cannot keep up with this new amount of usage as a result. What type of a good/service is the kitchen now?
c) What problems can be faced with this type of good? How can those problems be corrected?

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