1. Oral Roberts Dental Supplies has annual sales of $5,840,000. Ninety percent are on credit. The firm has $861,400 in accounts receivable. Compute the value of the average collection period. (Do not round intermediate calculations. Use a 360-day year.)

2. Issuing stock is another form of long-term financing. This option could include an initial public offering or using a private investor. Analyze the costs and benefits of equity financing. In addition, explain how relative risk from the view of the investor impacts the issuing organization’s cost of capital.