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Which lag is not present when using Monetary Policy?

It would be appropriate to use expansionary fiscal policy during prolonged periods of

If a Medicare recipient selects Medicare Part C:

When the reserve requirement is decreased, the excess reserves of member banks are _____.

Providers who routinely do not collect the patient’s deductible and coinsurance is:

Riders are:

TulipCo recently went public using a Dutch auction. The company wanted to sell 10 million shares. The bidding is given in the table below.  What is the IPO price and what is the percent underpricing if the price at the end of trading on the first day is $125? (as a percent of the IPO price) Investor Price Bid Number of shares bid 1 150 2 2 130 3 3 120 4 4 110 4 5 100 5 6 90 7

TulipCo recently went public using a Dutch auction. The company wanted to sell 10 million shares. The bidding is given in the table below.  What is the IPO price and what is the percent underpricing if the price at the end of trading on the first day is $125? (as a percent of the IPO price) Investor Price Bid Number of shares bid 1 150 2 2 130 3 3 120 4 4 110 4 5 100 5 6 90 7

Which of the following statements is (are) true? (1) The pecking order theory of capital structure implies that when a firm uses external finance it means that the firm did not have enough abundantinternal finance. (2) The trade-off theory suggests that holding other things constant, firms respond to a decrease in tax rate by issuing less debt. (3) When equity income is taxed less heavily than interest income, which is usually the case in real world, then the tax benefit of using debt is reduced compared with when there’s only corporate tax . (4) According to Modigliani and Miller, if capital markets are efficient without any forms of imperfection, there are no taxes and there are no costs of bankruptcy, then managers should not take capital structure into account while making decisions.

TransWorld Communications Inc., a large telecommunications company, is evaluating the possible acquisition of Georgia Cable Company (GCC), a regional cable company. TransWorld’s analysts project the following post-merger data for GCC (in thousands of dollars):     2009 2010 2011 2012 FCF   $  61.4 $  69.7 $  71.7 $  74.8 Tax rate after merger 35%         Beta after merger 1.5         Capital structure after merger 50% Debt         Beta before merger 1.4         Tax rate before merger 20%         Capital structure before merger 40% Debt         Risk-free rate 8%         Market risk premium 4%         Terminal growth rate of cash flow available to TransWorld 7%         If the acquisition is made, it will occur on January 1, 2009. All cash flows shown in the income statements are assumed to occur at the end of the year. GCC currently has a capital structure of 40% debt, but TransWorld would increase that to 50% if the acquisition were made. GCC, if independent, would pay taxes at 20%; but its income would be taxed at 35% if it were consolidated. GCC’s current market-determined beta is 1.40, and itsinvestment bankers think that its beta would rise to 1.5 post merger if the debt ratio were increased to 50%. The cost of goods sold is expected to be 65% of sales, but it could vary somewhat. Depreciation-generated funds would be used to replace worn-out equipment, so they would not be available to TransWorld’s shareholders. The risk-free rate is 8%, and the market risk premium is 4%. Please answer the following two questions: (1) What is the proper discount rate for valuing this acquisition?