The Rental Price of Capital Is Determined by

question 30

Multiple Choice

The rental price of capital is determined by

• A)forces of supply and demand in capital markets.
• B)the amount of equity that is generated in equity markets.
• C)the amount of bond financing used by profit-maximizing firms.
• D)the amount of dividends paid out to stockholders by profit-maximizing firms.

---

Definitions:

Weighted-Average Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighing the average by the quantities purchased at different prices.

Conversion Cost

The combination of direct labor and manufacturing overhead costs required to convert raw materials into finished products.

Molding Department

A specific section within a manufacturing facility where the process of shaping materials into desired forms through various molding techniques occurs.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on a weighted average of the costs.