When the Number of Shares of Common Stock Outstanding Multiplied

question 325

Multiple Choice

When the number of shares of common stock outstanding multiplied by the price per share is divided by the total market value of the firm the resulting value is defined as the:

• A) Market weight of debt.
• B) Debt-equity ratio.
• C) Cost of capital ratio.
• D) Capital structure weight.
• E) Equity to market weight.

Understand the concept and implications of the endowment effect in economic behavior.

Recognize various cognitive biases and their impact on decision-making, including status quo bias, framing effect, and anchoring effect.

Grasp the principles of prospect theory, especially regarding how people value gains and losses.

Comprehend the role of default options and their influence on people's choices and behaviors.

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Definitions:

Keynes

John Maynard Keynes was a British economist whose ideas, known as Keynesian economics, had a major impact on modern economic and political theory and on fiscal policies of governments.

Demand

The desire and ability of consumers to purchase goods or services at a given price.

Unemployment

The state of being without a job despite actively looking for work, used as an indicator of the health of the economy.

Saving Equals Investment

A macroeconomic identity where all saved money within the economy is assumed to equal all invested money, indicating a balance in the financial system.