Exhibit 5-1 Demand Curves

question 51

Multiple Choice

Exhibit 5-1 Demand curves

-In Exhibit 5-1,between points a and b,the price elasticity of demand measures:

• A)0.67.
• B)1.5.
• C)2.
• D)1.56.
• E)1.

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Definitions:

Corporate Tax Rate

The tax imposed on the net income of a corporation.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity and preferred equity, determining its financial stability and strategy.

WACC

Weighted Average Cost of Capital; an analysis of a company's capital expenditure costs, weighted proportionally across different capital categories.

Cost of Debt

The cost of debt is the effective rate that a company pays on its borrowed funds, accounting for interest expenses on all debts.