A Family of Four, a Single Mother and Three Children

question 3

Multiple Choice

A family of four, a single mother and three children under the age of 4, living in an impoverished inner-city neighborhood would have risk factors at the ______ level.

• A)mezzo
• B)neighborhood
• C)community
• D)micro

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Definitions:

Flotation Costs

The total costs that are incurred by a company in offering new securities to the public, including underwriting, legal, and registration fees.

WACC

Weighted Average Cost of Capital, a calculation that reflects the average rate of return a company is expected to pay its security holders.

Dividend Growth Model

A method for valuing a company's stock by using predicted dividends and adjusting them for growth to estimate future value.

Cost of Equity

Cost of equity refers to the return a company must offer investors to compensate for the risk they take by investing in the company's equity.