Firm's hl and ll are identical except for their leverage ratios and the interest rates they pay on debt. each has $20 million in assets, $4 million of ebit, and is in the 40 percent federal-plus-state tax bracket. firm hl, however, has debt ratio (d/a) of 50 percent and pays 12 percent interest on its debt, whereas ll has a 30 percent debt ratio and pays only 10 percent interest on its debt. calculate the rate of return on equity (roe) for hl

You park your car on sixth street and walk over to the quad for lunch. while crossing wright street, you are hit by a bicyclist and knocked to the ground. you hit your head so hard you are knocked out. when you wake up, the person who hit you is gone. you incur $45,000 in medical bills. the person who hit you would be liable for $150,000 in damages if you could find them. your policy will pay:

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?

How should the financial interests of stockholders be balanced with varied interests of stakeholders? if you were writing a code of conduct for your company, how would you address this issue?