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A block of mass m moving at a velocity v collides head on with another block of mass 2m at rest. If the coefficient of
restitution is 1/2, find the velocities of the blocks after the collision.
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Suppose that in the model of Myers and Majluf (1984) the parameters take on the following values:
λ = 0.60, H = 3, L = 2, I = 1.0, R = 1.25, r = 10 per cent.
Use the above data and answer the following questions:
(a) Does the model have a separating equilibrium, a pooling equilibrium, or both?
(b) Based on your answer to question (a), what is the gain in wealth of the current shareholders of a firm that
announces the issuing of new shares to finance the project
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