1. ABC Company sells 2,693 chairs a year at an average price per chair of $128. The carrying cost per unit is $33.28. The company orders 322 chairs at a time and has a fixed order cost of $33.8 per order. The chairs are sold out before they are restocked. What are the total carrying costs?
2. An all equity firm has a cost of capital of 9 percent. The firm is considering switching to a debt-equity ratio of .60 with a pretax cost of debt of 6 percent. What will the firm's cost of equity be if the firm makes the switch? Ignore taxes.
3. ABC Inc. last paid an annual dividend of $2.9.The dividends are expected to grow by 7.1% each year. What is the amount of expected dividend in Year 16. That is, what is D16?