For a Passenger Railroad Company, the Cost Incurred to Sell

question 21

Multiple Choice

For a passenger railroad company, the cost incurred to sell an additional ticket for a seat in a train is an example of:

• A)variable cost
• B)semi-variable cost
• C)fixed cost
• D)marginal cost
• E)none of the above

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Definitions:

Cost of Equity

The theoretical compensation a company pays to its equity investors for the risk involved in investing in the firm.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio compared to the market as a whole.

Stock Price

The cost of purchasing a share of a company's stock on the stock market.