Two cities have populations of 10,000 and 160,000 . Based on Reilly's law, the point of indifference is 40 miles from the larger city. What is the total distance between each city?

Which of the following is the correct formula for the profit margin ratio?

A) Net profit / Sales B) Net sales / Average total assets C) Net profit x Capital invested D) Operating income / Net sales

Which of the following is NOT a problem with the dividend model approach to estimating the cost of equity?

A) Some firms do not pay dividends. B) Some firms pay dividends but do not follow a policy of constant growth. C) Sometimes it is very difficult to estimate a constant dividend growth rate for a firm. D) All of the above are problems with the dividend approach to estimating the cost of equity.