The Slope of a Downward-Sloping Straight Line Can Be Calculated

question 160

Multiple Choice

The slope of a downward-sloping straight line can be calculated as the distance from the

• A)horizontal intercept of the line to the origin divided by the distance from the origin to the vertical intercept of the line.
• B)origin to the horizontal intercept of the line minus the distance from the origin to the vertical intercept of the line.
• C)vertical intercept of the line to the origin divided by the distance from the origin to the horizontal intercept of the line.
• D)vertical intercept of the line to the origin minus the distance from the origin to the horizontal intercept of the line.

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Definitions:

Flotation Cost

The total costs that a company incurs when it issues new securities, including underwriting, legal, and registration fees.

Annual Dividend

The total amount of dividends a company pays to its shareholders in one year, usually presented on a per share basis.

WACC

Weighted Average Cost of Capital; a calculation of a company's cost of capital in which each category of capital is proportionately weighted.

Corporate WACC

The weighted average cost of capital for a corporation, reflecting the cost of its equity and debt financing.