1. HAW Inc, may produce either $100,000 of net income or $130,000 of net income, depending on the economic, these profits are the result of annual sales of $1,200,000 or $1,800,000. what is the degree of spreading Leverages?
2. KMWinc, sells a finance textbook for $150 each. The variable cpst per book is $30 and the fixed cost per year is $30,000. The process of creating a textbook costs $150,000 and average book has a life spat pf 3 years. Using straight line depreciation and a tax rate of 25%, what is the economic break even number of the books must be sold given a discount rate of 12%?
3. A stock with risk equal to the market is expected to sell for $46 at the end of the year and pay a $2.00 Dividend at that time. If the risk free interest rate is 4% and the market risk premium is 7% what is the likely stock price today?