Figure 7.1 -Refer to Figure 7.1.All Else Equal,an Increase in the Number

question 72

Multiple Choice

Figure 7.1

-Refer to Figure 7.1.All else equal,an increase in the number of workers will cause a

• A) shift from PF₁ to PF₂.
• B) shift from PF₂ to PF₁.
• C) movement up and to the right along PF₁.
• D) movement down and to the left along PF₂.

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Definitions:

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay to all its security holders to finance its assets.

WACC

Weighted Average Cost of Capital; a formula used to calculate a business's cost of capital, where every type of capital is weighted according to its proportion.

Yield-to-Maturity

The total return anticipated on a bond if the bond is held until its maturity date, expressed as an annual rate.

Tax Rate

The percentage defining how much of a person's or business's income is allocated to taxes.