The Term Opportunity Cost Refers to the

question 60

Multiple Choice

The term opportunity cost refers to the

• A)value of what is gained when a choice is made.
• B)difference between the value of what is gained and the value of what is forgone when a choice is made.
• C)value of what is forgone when a choice is made.
• D)direct costs involved in making a choice.

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Definitions:

Repurchase

The act of buying back shares of its own stock by a company, reducing the number of outstanding shares in the market.

Equity Financed

The practice of raising capital for a business through the sale of shares in the company.

Cost of Debt

The effective rate that a company pays on its current debt, which can include bank loans, bonds, and other forms of debt.

Repurchasing Shares

The act of a company buying back its own stocks from the marketplace, which can affect the company’s share price and equity structure.