What happens to the value of the owners equity

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Q. A paper company produces according to the following production function: q=6kl
Determine the firm's optimal ratio of labour to capital

Q. ‘Give an example of a bank balance sheet with a leverage ratio of 10. If the value of the bank's assets rises by 5 percent (%) Illustrate what happens to the value of the owners' equity in this bank? Elucidate how large a decline in the value of bank assets would it take to reduce this bank's capital to zero?

Reference no: EM1319193

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