Which of the Following Is Not One of the Assumptions

question 118

Multiple Choice

Which of the following is not one of the assumptions of the quantity theory of money?

• A)Velocity is constant.
• B)The money growth rate is constant.
• C)Real output is independent of the money supply.
• D)Causation goes from money supply to prices.

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Definitions:

WACC

Weighted Average Cost of Capital. It represents the average rate that a company is expected to pay to finance its assets, weighted according to the proportion of equity and debt in its capital structure.

Free Cash Flow

The amount of cash generated by a business that is available for distribution among all the securities holders of an organization, including dividends, share repurchases, and debt repayments.

Cost of Equity

The return that investors require for investing in a company's equity, often estimated using models such as the Capital Asset Pricing Model (CAPM).

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return.