1. Amish Ent makes wooden play sets. The company pays annual rent of $350,000 per year and pays salaries of $120,000 per year. Each play set requires $300 of wood, ten hours of labor at $50 per hour, and variable overhead costs of $50. Fixed advertising expenses equal $40,000 per year. Each play set sells for $2350. What is their break-even output level?
2. The Down and Out Co. just issued a dividend of $1.10 per share on its common stock. The company is expected to maintain a constant 0.03 growth rate in its dividends indefinit ely. If the stock sells for $30.00 a share, what is the company's cost of equity? Enter the answer with 4 decimals (e.g. 0.1234)