Question 7 of 10 Both term life and whole life insurance policies:
A. cover the policyholder's long-term health and disability expenses.
B. pay money to beneficiaries upon the policyholder's death.
C. earn interest on the amount of the policy.
O D. have a maximum term of 40 years.
SUBMIT

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.