The Following Are Examples of Real Assets

question 28

Multiple Choice

The following are examples of real assets:

• A)machinery, office buildings, and warehouses only.
• B)machinery and office buildings only.
• C)common stock only.
• D)machinery only.

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Definitions:

Debt-Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

Weighted Average

A mathematical calculation that takes into account the varying degrees of importance of the numbers in a data set, providing a measure that reflects the relative importance of each value.

Unlevered Cost

The cost of an investment or project without considering the effects of debt financing, focusing solely on equity-financed expenses.

Cost of Debt

The effective rate a company pays on its current debt, incorporating the tax shield benefits of interest payments.