Discouraged Workers

question 135

Multiple Choice

Discouraged workers

• A)would increase unemployment rate if they were added to the number of unemployed workers.
• B)are counted as one-half of a worker in the unemployment statistics.
• C)are counted as unemployed workers when the unemployment rate is calculated.
• D)are not included in the calculation of the unemployment rate, the labor force, or the working-age population.
• E)would decrease the unemployment rate if they were added to the number of unemployed workers.

Calculate the cost of different types of capital (equity, preferred stock, debt).

Determine the market value of a firm using its equity, debt, and preferred stock values.

Understand and calculate the cost of equity using different models (e.g., Dividend Discount Model, CAPM).

Calculate the market capitalization of a firm and understand its significance.

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Definitions:

Intrinsic Value

An estimate of the true value of an asset, including tangibles and intangibles, based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.

Beta Coefficient

An index of a security's fluctuation in value as compared to the broader market, signifying its relative risk versus the average market risk.

Characteristic Line

In finance, a line that describes the relationship between the returns on a stock and the returns on the market, used in the Capital Asset Pricing Model (CAPM).

Stable Equilibrium

A state in which a system, once disturbed, returns to its original condition because the equilibrium is stable.