1. An all equity firm has a cost of capital of 12 percent. The firm is considering switching to a debt-equity ratio of .55 with a pretax cost of debt of 8 percent. What will the firm's cost of equity be if the firm makes the switch? Ignore taxes.
2. A company has net income of $196,000, a profit margin of 9.7 percent, and an accounts receivable balance of $135,370. Assuming 70 percent of sales are on credit, what is the company’s days’ sales in receivables? Use 365 days a year
Days' sales in receivables = _______days