Wingler Communications Corporation (WCC) produces premium stereo
headphones that sell for $28.90 per set, and this year's sales are
expected to be 440,000 units. Variable production costs for the
expected sales under present production methods are estimated at
$10,000,000, and fixed production (operating) costs at present are
$1,560,000. WCC has $4,800,000 of debt outstanding at an interest
rate of 8%. There are 240,000 shares of common stock outstanding,
and there is no preferred stock. The dividend payout ratio is 70%,...