LeCompte Learning Solutions is considering making a change to its capital structure in hopes of increasing its value. The company's capital structure consists of debt and common stock. In order to estimate the cost of debt, the company has produced the following table:

The company uses the CAPM to estimate its cost of common equity, r_s. The risk-free rate is 5% and the market risk premium is 6%. LeCompte estimates that if it had no debt its beta would be 1.0. (Its "unlevered beta," b_U, equals 1.0.) The company's tax rate, T, is 40%.

On the basis of this information, what is LeCompte's optimal capital structure, and what is the firm's cost of capital at this optimal capital structure?

You are a banker and are confronted with a pool of loan applicants, each of whom can be either low risk or high risk. There are 600 low-risk applicants and 400 highrisk applicants and each applicant is applying for a $100 loan. A low-risk borrower will invest the $100 loan in a project that will yield $150 with probability 0.8 and nothing with probability 0.2 one period hence. A high-risk borrower will invest the $100 loan in a project that will yield $155 with probability 0.7 and nothing with probability 0.3 one period hence. You know that 60% of the applicant pool is low risk and 40% is high risk, but you cannot tell whether a specific borrower is low risk or high risk. You are a monopolist banker and have $50,000 available to lend. Everybody is risk neutral. The current riskless rate is 8%. Each borrower must be allowed to retain a profit of at least $5 in the successful state in order to be induced to apply for a bank loan. You have just learned that 1,000 loan applications have been received after you announced a 45% loan interest rate. You can satisfy only 500. What should be your optimal (profit-maximizing) loan interest rate? Should it be 45% (at which you must ration half the loan applicants) or a higher interest rate at which there is no rationing?

1. Selected activities and other information are provided for Patterson Company for its most recent year of operations.

   						Expected Consumption Ratios
   Activity		Driver		Quantity		Wafer A		Wafer B
   7.   Inserting dies		Number of dies		2,500,000		0.7		0.3
   8.  Purchasing materials		Number of purchase    orders		2,400		0.2		0.8
   1.  Developing test programs		Engineering hours		12,000		0.25		0.75
   3.  Testing products		Test hours		20,000		0.6		0.4
   ABC assignments						$150,000		$150,000
   Total overhead cost								$300,000

   Required:

   1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar.

   Inserting dies cost pool	$
   Purchasing cost pool	$

   2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar.

   Wafer A	$
   Wafer B	$

   3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2.

   Form reduced system cost pools for activities 1 and 3.

   Do not round interim calculations. Round your final answers to the nearest dollar.

   Developing test programs cost pool	$
   Testing products cost pool	$

   Assign the costs of the reduced system cost pools to Wafer A and Wafer B.

   Wafer A	$
   Wafer B	$

You are a banker and are confronted with a pool of loan applicants, each of whom can be either low risk or high risk. There are 600 low-risk applicants and 400 highrisk applicants and each applicant is applying for a $100 loan. A low-risk borrower will invest the $100 loan in a project that will yield $150 with probability 0.8 and nothing with probability 0.2 one period hence. A high-risk borrower will invest the $100 loan in a project that will yield $155 with probability 0.7 and nothing with probability 0.3 one period hence. You know that 60% of the applicant pool is low risk and 40% is high risk, but you cannot tell whether a specific borrower is low risk or high risk. You are a monopolist banker and have $50,000 available to lend. Everybody is risk neutral. The current riskless rate is 8%. Each borrower must be allowed to retain a profit of at least $5 in the successful state in order to be induced to apply for a bank loan. You have just learned that 1,000 loan applications have been received after you announced a 45% loan interest rate. You can satisfy only 500. What should be your optimal (profit-maximizing) loan interest rate? Should it be 45% (at which you must ration half the loan applicants) or a higher interest rate at which there is no rationing?

You are a banker and are confronted with a pool of loan applicants, each of whom can be either low risk or high risk. There are 600 low-risk applicants and 400 highrisk applicants and each applicant is applying for a $100 loan. A low-risk borrower will invest the $100 loan in a project that will yield $150 with probability 0.8 and nothing with probability 0.2 one period hence. A high-risk borrower will invest the $100 loan in a project that will yield $155 with probability 0.7 and nothing with probability 0.3 one period hence. You know that 60% of the applicant pool is low risk and 40% is high risk, but you cannot tell whether a specific borrower is low risk or high risk. You are a monopolist banker and have $50,000 available to lend. Everybody is risk neutral. The current riskless rate is 8%. Each borrower must be allowed to retain a profit of at least $5 in the successful state in order to be induced to apply for a bank loan. You have just learned that 1,000 loan applications have been received after you announced a 45% loan interest rate. You can satisfy only 500. What should be your optimal (profit-maximizing) loan interest rate? Should it be 45% (at which you must ration half the loan applicants) or a higher interest rate at which there is no rationing?

An organization collected preference ratings on various brands they consider.

The operation manager at a tire manufacturing company believes that the mean mileage of a tire is 23,383 miles, with a variance of 21,436,900. What is the probability that the sample mean would be less than 22,909 miles in a sample of 286 tires if the manager is correct? Round your answer to four decimal places.

Consider the following regression model. Weekend is whether or not the visit was on a weekend. Distance is how far the guests have to travel to get to the amusement park. Rides and Games are the number of rides and games, respectively. Clean is a cleanliness score from 1-10. Num.Child is the number of children with the guest. Wait is the average wait time for the rides.

Multiple R-squared: 0.8632,

Adjusted R-squared: 0.8787

F-statistic: 151.6 on 7 and 492 DF, p-value: .00000000022

Coeffiients:

Estimate Std. Error t value Pr(>ItI)

(Intercept) -140.61254 7.15405 -19.655 0.0000016

wekend -0.71573 0.80870 -0.885 0.376572

distance 0.04494 0.01219 3.686 0.000253

rides 0.61361 0.01219 5.072 0.0000059

games 0.13833 0.05872 2.356 0.18882

clean 0.92725 0.13593 6.821 0.000061

num.child 3.61602 0.26980 13.403 0.000025

wait 0.56476 0.04064 13.896 0.000031

a) do you think that this is a good regression model? Why or why not?

b)should all of the input variables in the model be included? If not, which variables should be removed from the model and why?

c) Generate a point estimate for the satisfaction level of an amusement park visit that is on a Friday, to an amusement park that is 63 miles away, that has 20 rides and 15 games. The park has a cleanliness score of 8, and an average wait time for each ride of 10 minutes. The guest has 3 children with them.

IN C++ PLEASE. Use ONLY: exception handling, read and write files, arrays, vectors, functions, headers and other files, loops, conditionals, data types, assignment.  

1. Calculating fuel economy. This program will use exceptions and stream errors to make a robust application that gets the number of miles and gallons each time the user fuels their car. It will put those values into vectors. Once the user wants to quit enter values, it will calculate the fuel economy.
   1. Create GetMiles() function that returns double.
      1. If there is a stream error, then throw a runtime_error with the message Invalid input received, you must enter a decimal number. Don’t forget to clear the error and ignore all characters until the end of the stream.
      2. If the value is less then or equal to zero, then throw a runtime_error with the message. Miles cannot be less than 0.
      3. Otherwise, return the miles the user entered
   2. Create GetGallons() function that returns double.
      1. If there is a stream error, then throw a runtime_error with the message Invalid input received, you must enter a decimal number. Don’t forget to clear the error and ignore all characters until the end of the stream.
      2. If the value is less than or equal to zero, then throw a runtime_error with the message. Gallons cannot be less than 0.
      3. Otherwise, return the miles the user entered
   3. Create GetMPG(vector<double miles, vector<double> gallons) function that returns a double.
      1. If the size of the vectors is 0, then throw a runtime_error with the message No values recorded MPG is nan
      2. Otherwise, total the miles and gallons and return the miles per gallon.
   4. The main program should loop and get the Gallons and Miles catching any exceptions that were thrown. Then ask if they want to enter another tank. If they enter gallons and miles put the values into the vectors given. When the user is done the program should calculate the MPG by calling GetMPG, catching the exception if the user did not enter any values. Then it should show the result.

Stream Errors

   cout << "Enter a number: " << endl;

   cin >> number;

   if (cin.fail()) {

      // Clear error state

      cin.clear();

      // Ignore characters in stream until newline

      cin.ignore(numeric_limits<streamsize>::max(), '\n');

      cout << "There was an error: " << endl;

   }

Throwing Errors

        throw runtime_error("Invalid value.");

Catching Errors

      try {

         // Code to try

      }

      catch (runtime_error &excpt) {

         // Prints the error message passed by throw statement

         cout << excpt.what() << endl;

      }

Make sure you include stdexcept and vector as well as the other standard modules.

Consider a portfolio with three assets E[rA]=10% E[rB]=12% E[rC]=8%; σA2 =0.008 σB2 =0.010 σC2 =0.005; ρA,B =0.2 ρB,C = 0.0 ρA,C = −0.2

a) Consider the portfolio weights xA = 0.3 and xB = 0.3. Calculate the portfolio weight xC , the expected portfolio return, and the variance of the portfolio returns.

b) Consider the portfolio weights xA = 0.3. Calculate the expected portfolio return as a function of xB

c) Consider the portfolio weights xA = 0.3. Calculate the portfolio return variance as a function of xB

d) Calculate the portfolio which has the smallest variance, for which xA = 0.3.