Scenario: Two firms in a market sell identical goods and charge a price of $5 per unit. However, the cost of a crucial input used in producing these goods has increased. As a result, both of the firms are considering increasing the price of the good to $6. If the firms do not raise their prices at the same time, the firm that raises the price stands to lose market share. The payoff matrix shows their respective payoffs on the basis of the prices charged by each. Here, payoffs denote the number of units sold by each firm. The first number listed in each cell is the payoff to the row player and the second number listed is the payoff to the column player. Firm 2
price $5 price $6
50 100
Firm 1 price-$5 50 0
price $6 0 40
100 40
Refer to the scenario above. Which of the following is true?
A. The dominant strategy equilibrium is the Nash equilibrium.
B. This game does not have a Nash equilibrium.
C. Nash equilibrium occurs if Firm 1 charges a price of $5 and Firm 2 charges a price of $6.
D. Nash equilibrium occurs if Fim 1 charges $6 and Firm 2 charges $5.

New team of management has taken over. as a result, organizational changes from a country-club style leadership where everyone does whatever they want has changed to a more mechanistic, structured, top-down management style. what ethical issues should the employees consider and how should they go about addressing these?

Afirm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. because interest is tax deductible, the relevant cost of debt used to calculate a firm's wacc is the cost of debt, rd (1 – t). the cost of debt is used in calculating the wacc because we are interested in maximizing the value of the firm's stock, and the stock price depends on cash flows. it is important to emphasize that the cost of debt is the interest rate on debt, not debt because our primary concern with the cost of capital is its use in capital budgeting decisions. the rate at which the firm has borrowed in the past is because we need to know the cost of capital. for these reasons, the on outstanding debt (which reflects current market conditions) is a better measure of the cost of debt than the . the on the company's -term debt is generally used to calculate the cost of debt because more often than not, the capital is being raised to fund -term projects. quantitative problem: 5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,600 face value and a 8% coupon, semiannual payment ($64 payment every 6 months). the bonds currently sell for $845.87. if the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? round your answer to 2 decimal places. do not round intermediate calcu

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