The Mann Company belongs to a risk class for which the appropriate discount rate is 12 percent. The company currently has 222,000 outstanding shares selling at $114 each. The firm is contemplating the declaration of a $4 dividend at the end of the fiscal year that just began. Assume there are no taxes on dividends. Answer the following questions based on the Miller and Modigliani model, which is discussed in the text. a. What will be the price of the stock on the ex-dividend date if the dividend is declared

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

Parks corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. the investment would provide cash inflows of $2,000 per year for six years. the working capital would be released for use elsewhere when the project is completed. if the company's discount rate is 10%, the investment's net present value is closest to (ignore income taxes) ?

What are the weak points of economic costs that are part of a free enterprise economy?