Ghost, inc., has no debt outstanding and a total market value of $273,600. earnings before interest and taxes, ebit, are projected to be $43,000 if economic conditions are normal. if there is strong expansion in the economy, then ebit will be 17 percent higher. if there is a recession, then ebit will be 28 percent lower. the company is considering a $145,000 debt issue with an interest rate of 6 percent. the proceeds will be used to repurchase shares of stock. there are currently 7,600 shares outstanding. ignore taxes for questions a and b. assume the company has a market-to-book ratio of 1.0 and the stock price remains constant. a-1. calculate return on equity (roe) under each of the three economic scenarios before any debt is issued.

Suppose that the u.s. dollars-mexican pesos exchange rate is fixed by the u.s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs.which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u.s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u.s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u.s. dollars.