Use the Figure Below to Answer the Following Question

question 47

Multiple Choice

Use the figure below to answer the following question.

Figure 17.2.3
-Refer to Figure 17.2.3. The graph provides information about a waste disposal system in a city of 1 million people. If the city installs the efficient capacity, then each person pays ________ in taxes.

• A)$125
• B)$62.50
• C)$250
• D)zero
• E)$31.25

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Definitions:

Dividend Growth Model

A model that determines the current price of a stock as its dividend next period, divided by the discount rate, less the dividend growth rate.

Cost of Equity

The theoretical compensation a company provides to its shareholders for the risk they assume by investing their funds.