Suppose that you have tastes for grits and "other goods" (where the price of "other goods" is normalized to 1). Assume throughout (unless otherwise stated) that your tastes are quasilinear in grits. The government decides to place a tax on grits — thus raising the price of grits from p to p + t. a. On a graph with grits on the horizontal axis and "other goods" on the vertical, illustrate the before- and after-tax budget.
b. Illustrate your optimal consumption bundle after the tax is imposed, then indicate how much tax revenue T the government collects from you.
c. Illustrate the most L you would bc willing to pay to not have the tax.
d. Does your answer depend on the fact that you know your tastes are quasilinear in grits?
e. On a graph below the one you have drawn, derive the regular demand curve as well as the MWTP curve.
f. Illustrate T and L on your lower graph and indicate where in the graph you can locate the deadweight loss from the tax.
g. Suppose you only observed the demand curve in the lower graph, and you knew nothing else about tastes. If grits were actually a normal good (rather than a quasilinear good), would you under- or overestimate that deadweight loss by assuming grits are quasilinear?

If a bond is issued at a premium the effective interest rate is most likely

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity.calculate the cost of new stock using the dividend growth approach.what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics.each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings.equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g

Presented below is information for annie company for the month of march 2018. cost of goods sold $245,000 rent expense $ 36,000 freight-out 7,000 sales discounts 8,000 insurance expense 5,000 sales returns and allowances 11,000 salaries and wages expense 63,000 sales revenue 410,000 instructions prepare the income statement.