After building a profitable construction company together over several decades, Larry Stevenson and Jim Shapiro recognized that their differences had become irreconcilable. Stevenson wanted to buy

out Shapiro, who was willing to sell for the right price. After months of haggling and legal maneuvering,

Stevenson made his final offer: $8.5 million for Shapiro’s shares in the company.

The company is worth about $20 million, Shapiro thought to himself. I own 49% of the shares.

Heck, I helped build this company. I’m not going to accept anything less than my fair share—$10 million.

I’d rather fight in court than accept $8.5 million. Shapiro rejected the offer, and each party prepared for

a trial.

Shapiro’s rationale for rejecting Stevenson’s offer seemed reasonable enough. Furthermore,

Shapiro’s lawyers assured him, a court ruling very likely would be in his favor.

a) What do you think about Shapiro’s decision? Is it right or wrong? Why?

b) If you were Shapiro in this case, what would you asscess your BATNA?

Which of the following best describes how the federal reserve bank banks during a bank run? a. the federal reserve bank regulates exchanges to prevent the demand for withdrawals from rising above the required reserve ratio. b. the federal reserve bank acts as an insurance company that pays customers if their bank fails. c. the federal reserve bank has the power to take over a private bank if customers demand too many withdrawals. d. the federal reserve bank can provide a short-term loan to banks to prevent them from running out of money. 2b2t

Which of the following statements about the relationship between economic costs and accounting costs is true? multiple choice accounting costs are equal to or greater than economic costs. accounting costs must always equal economic costs. accounting costs are always greater than economic costs. accounting costs are always less than or equal to economic costs.

Suppose that xtel currently is selling at $40 per share. you buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. the rate on the margin loan is 8%. a. what is the percentage increase in the net worth of your brokerage account if the price of xtel immediately changes to (a) $44; (b) $40; (c) $36? (leave no cells blank - be certain to enter "0" wherever required. negative values should be indicated by a minus sign. round your answers to 2 decimal places.) b. if the maintenance margin is 25%, how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.) c. how would your answer to requirement 2 would change if you had financed the initial purchase with only $10,000 of your own money? (round your answer to 2 decimal places.) d. what is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if xtel is selling after one year at (a) $44; (b) $40; (c) $36? (negative values should be indicated by a minus sign. round your answers to 2 decimal places.) e. continue to assume that a year has passed. how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.)