The Occurrence of Bank Failures in the United States

question 55

Multiple Choice

The occurrence of bank failures in the United States

• A)ended after 1933 and the creation of the FDIC.
• B)increased dramatically during the Clinton administration.
• C)reappeared in intensity in the late 1990s and early 2000s.
• D)reappeared in the 1980s and early 1990s and again in 2006.

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Definitions:

CGT

Capital Gains Tax, which is a tax on the profit realized on the sale of a non-inventory asset.

Flotation Cost

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

Target Capital Structure

The mix of debt, equity, and other financing sources a company aims to use to finance its operations and growth.

WACC

Weighted Average Cost of Capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets.