A Multiple-Choice Test with Five Options Has a Chance Performance

question 57

Multiple Choice

A multiple-choice test with five options has a chance performance level of

• A).50.
• B).25.
• C).20.
• D).10.

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Definitions:

Tax Rate

The part of an individual's or corporation's earnings that is subject to taxation.

Debt-Equity Ratio

The ratio indicating a corporation's reliance on debt financing, found by dividing its total debts by the equity held by its shareholders.

After-Tax Cost of Debt

The net cost of debt after accounting for the effects of taxes, reflecting the actual cost to a company.

Cost of Equity

The theoretical compensation paid by a company to its equity investors, or shareholders, for the risk involved in investing their capital.