A Price Maker Is a Firm That

question 75

Multiple Choice

A price maker is a firm that

• A) sets the prices that the market makes.
• B) has a price that covers all of its costs.
• C) sets prices that maximize consumer surplus.
• D) sets prices equal to that of the market.
• E) has some market power.

Understand the impact of corporate tax rates on WACC and individual cost components.

Know how to identify the appropriate cost of debt for WACC calculations.

Learn the relevance of weighted average flotation costs in investment decisions.

Understand the determination of the cost of equity using the dividend discount model and CAPM.

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