Why Is Gold Mining Largely Unnecessary

question 20

Multiple Choice

Why is gold mining largely unnecessary?

• A)Gold prices have been in a steady decline for the last 100 years.It is cheaper to buy used gold.
• B)Tons of gold are already in circulation around the world.It is not necessary to mine new gold.
• C)Gold is easy to find by panning rivers and other waterways.
• D)Gold can be extracted from the top of the earth's crust with much less environmental impact that traditional mining methods.

---

Definitions:

Weighted Average Cost of Capital

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

Levered Cost of Capital

The cost of capital for a company that has debt in its capital structure, reflecting the additional risk introduced by the use of debt.

Debt-equity Ratio

A gauge for the relative amounts of shareholders' equity and debt in a company's asset financing approach.

Interest Tax Shield

The reduction in income taxes that results from taking the allowable interest expense deductions from taxable income.