Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 3. a. If household wealth falls by 6 percent because of declining house values, and the real interest rate falls by 3 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level? b. In what direction and by how much will it eventually shift?

Information on gerken power co., is shown below. assume the company’s tax rate is 40 percent. debt: 9,400 8.4 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 100.5 percent of par; the bonds make semiannual payments. common stock: 219,000 shares outstanding, selling for $83.90 per share; beta is 1.24. preferred stock: 12,900 shares of 5.95 percent preferred stock outstanding, currently selling for $97.10 per share. market: 7.2 percent market risk premium and 5 percent risk-free rate. required: calculate the company's wacc. (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) wacc %