Historic Average Capital Costs Are New (Marginal) Resource Allocation Decisions

question 38

Multiple Choice

Historic average capital costs are new (marginal) resource allocation decisions.

• A)not relevant for making
• B)very useful when making
• C)necessary for making
• D)the relevant costs for making

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Definitions:

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate.

Bond Certificate

A physical document representing the investor's right to receive the principal and interest from a bond issuer.

Semiannual Interest

Interest that is calculated and paid twice a year, often on a bond or loan.

Bond Premium

The amount by which the market price of a bond exceeds its face value, usually occurring when the bond's interest rate is higher than the current market rate.