Fletcher Corporation is debating whether to convert its all-equity capital structure to one that is 2% debt. Currently, there are 1,933 shares outstanding selling at $69 per share. EBIT is expected to remain at $14,204 per year forever. The interest rate on new debt is 6%, and there are no taxes. You currently hold 100 shares of Fletcher. What is your annual cash flow under the current (i. e., all-equity) capital structure? Assume that Fletcher has a 100% dividend payout ratio.

10. problems and applications q10 a market is described by the following supply-and-demand curves: qsqs = = 2p2p qdqd = = 300â’p300â’p the equilibrium price is $ and the equilibrium quantity is . suppose the government imposes a price ceiling of $90. this price ceiling is , and the market price will be $ . the quantity supplied will be , and the quantity demanded will be . therefore, a price ceiling of $90 will result in . suppose the government imposes a price floor of $90. this price floor is , and the market price will be $ . the quantity supplied will be and the quantity demanded will be . therefore, a price floor of $90 will result in . instead of a price control, the government levies a tax on producers of $30. as a result, the new supply curve is: qsqs = = 2(pâ’30)2pâ’30 with this tax, the market price will be $ , the quantity supplied will be , and the quantity demanded will be . the passage of such tax will result in .