In the Revised Version of the Solow Growth Model the Optimal

question 46

Multiple Choice

In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:

• A)monetary growth.
• B)government spending.
• C)the saving rate.
• D)all of the above.

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital (debt, equity) is proportionately weighted.

Capital Component

Individual sources of funding that make up a company's capital structure, including debt and equity.

Accounts Payable

Accounts Payable is the account showing the amount a company owes to suppliers or vendors for goods or services purchased on credit.

Target Capital Structure

The optimal mix of debt, equity, and other financing sources that a company aims to maintain to fund its operations and growth.