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It flashes over the newswires: an airliner has crashed! What caused it? Could it have been avoided? Dr. Maxine Lubner devotes her career to answering these questions. As a teenager, Maxine was fascinated by flying. (1) Living near a small country airport, she and her father would ride out in their beach buggies and spontaneously race alongside the airplanes as the planes were slowing down to land. Maxine's "team" usually won. After studying psychology as andergraduate, Dr. Lubner earned a Ph.D. in socio-medical sciences, along with a pilot's license. She has studied human factors in airline accidents, as well as taught and designed programs in aviation safety. She has worked for the Federal Aviation Administration (FAA) and on the faculties of various aeronautical colleges. (2) Professionals like Dr. Lubner design safety programs that are scientifically based, rather than arbitrarily determined. (3) In the 1970s, when commercial airline travel became more affordable, people prophesized that there would be an increase in accidents. Fortunately, this did not happen. In fact, airline accidents are quite rare. When they do happen, though, they are often due to a chain of events, rather than just a single incident or cause. The training of airline flight crews is a key to avoiding accidents. (4) Realizing that a single crash can result in many casualties, which could put an airline out of business, airlines and the FAA contrive to train crews in accident prevention and emergency response, even in the face of tight budgets. Pilots and crews must have keen decision-making and leadership skills. (5) A sudden emergency doesn't allow time for deliberation. Ground maintenance personnel also play an important role in averting crashes. (6) The tiniest haphazard event can cause disaster. (7) For example, if a repair crew unwittingly forgets to vacuum up a few metal splinters, these shards can eat through the insulation that surrounds electrical wires and cause a fire during a flight.

A number of years ago, the circumstances around an airplane crash led people to suspect foul play. Had a missile hit the plane? (8) Was a passenger involved in a premeditated bombing? An investigation revealed complex but accidental causes. It had been a hot day, so the air conditioning was operating while the plane waited on the ground to take off. This heated up the vapors in the fuel tank. (9) Coincidentally, the insulation on some of the electrical wires had worn off. When the fuel vapors reached those wires, it caused a terrible explosion. As a result of these findings, the position of fuel tanks on airliners has been moved, and there has been an increased emphasis on electrical maintenance. In another airplane accident, part of the engine came loose, and the plane spun out of control. (10) Fortuitously, an off-duty pilot was among the passengers. He helped work the throttles by hand, as the pilots controlled the plane's descent! This saved many lives.

If you are interested in a career in aviation, you might want to investigate the undergraduate degrees available at over fifty universities. Perhaps you will someday be in one of Dr. Lubner's classes.

Each sentence below refers to a numbered sentence in the passage. Write the letter of the choice that gives the sentence a meaning that is closest to the original sentence.

Professionals like Dr. Lubner design safety programs that are scientifically based, rather than \rule{2cm}{0.15mm} determined.

a. unknowingly

b. strangely

c. randomly

d. cleverly


Buena Terra Corporation is reviewing its capital budget for the upcoming year. It has paid a $3.00\$ 3.00 dividend per share (DPS) for the past several years, and its shareholders expect the dividend to remain constant for the next several years. The company's target capital structure is 60%60 \% equity and 40%40 \% debt, it has 1,000,0001,000,000 shares of common equity outstanding, and its net income is $8\$ 8 million. The company forecasts that it will require $10\$ 10 million to fund all of its profitable (i.e., positive NPV) projects for the upcoming year.

Suppose once again that Buena Terra's management wants to maintain the $3.00\$ 3.00 DPS. In addition, the company wants to maintain its target capital structure ( 60%60 \% equity and 40%40 \% debt) and its $10\$ 10 million capital budget. What is the minimum dollar amount of new common stock that the company would have to issue to meet each of its objectives?


Answered 10 months ago
Answered 10 months ago
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This exercise will determine the minimum amount of new common stock the company must issue.

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