Cardinal Numbers

question 23

Multiple Choice

Cardinal numbers:

• A) refer to counting birds.
• B) refer to counting with understanding.
• C) are not appropriate for young children.
• D) are the numbers one, two, three, and so on.

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Definitions:

M&M Proposition II

A theory in corporate finance that suggests a company's cost of equity capital is a linear function of its capital structure, under a no-tax scenario.

Interest Tax Shield

The savings in income tax that a company achieves through deducting its interest expense from its taxable income.

WACC

Weighted Average Cost of Capital, a calculation of a firm's cost of capital where each category of capital is proportionately weighted.