Arug manufacturer has decided to use 7 compatible colors in her rugs. however, in weaving a rug, only 5 spindles can be used. in advertising, the rug manufacturer wants to indicate the number of different color groupings for sale. how many color groupings using the seven colors taken five at a time are there? (this assumes that 5 different colors will go into each rug, i. e., there are no repetitions of color.)

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.