What Name Is Given to the Rate of Exchange Between

question 27

Multiple Choice

What name is given to the rate of exchange between certain future consumption and certain current consumption, when there is no inflation and no risk?

• A) Pure rate of interest
• B) Internal rate of return
• C) Inflation proofing
• D) Net rate of return

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Definitions:

WACC

The Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital, where each category of capital is proportionately weighted.

Tax Rates

The percentage at which an individual or corporation is taxed, which can vary based on the taxable amount or income.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

Dividend Yield

A stock’s annual dividend divided by its current price.