Your Friend Was Just Arrested for Robbing a Drug Store

question 25

Multiple Choice

Your friend was just arrested for robbing a drug store downtown.Based on a failure of source monitoring, why might the cashier think your friend was the robber?

• A) He visits the coffee store next door almost every morning.
• B) He fits the description of one of the FBI's most wanted.
• C) He is of a different race than the cashier.
• D) He is several years older than the cashier.

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Definitions:

Capital Accounts

Financial records showing the ownership interests and funds contributed or withdrawn by owners or investors in a company.

Target Capital Structure

The ideal mix of debt, preferred stock, and common equity that a company aims to hold in order to minimize its cost of capital and maximize its value.

Floatation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees and registration fees.

WACC

Weighted Average Cost of Capital - a measure of a firm's cost of capital in which each category of capital is proportionately weighted.