If, During the First Six Years of Our Lives, We

question 22

Multiple Choice

If, during the first six years of our lives, we reached faulty conclusions based on our life experience, we are likely to​  

• A)challenge them as we realize that they are faulty. 
• B)change them during adolescence. 
• C)ignore them in order to function effectively. 
• D)still be operating on the basis of those conclusions.

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Definitions:

Leverage

The use of borrowed funds to increase the potential return of an investment.

Optimal Capital Structure

The best mix of debt, preferred stock, and common equity that maximizes a company’s stock price while minimizing its cost of capital.

Stock Price

The current market price of a company's shares, as bought and sold by investors on stock exchanges.

Cost of Capital

The mandatory rate of gain a business must realize on its investment schemes to maintain its market identity and attract funds.