A Fall in the Price of Wheat Fertilizer ________ the Equilibrium

question 345

Multiple Choice

A fall in the price of wheat fertilizer ________ the equilibrium price of wheat and ________ the equilibrium quantity of wheat.

• A) raise; increase
• B) raise; decrease
• C) lower; increase
• D) lower; decrease

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Definitions:

Unlevered Cost

The cost of capital for a company that has no debt in its capital structure, reflecting the cost of equity alone.

Expected Earnings

The forecasted profits of a company, often used by investors to make investment decisions.

Annual Coupon

The annual percentage rate of interest a bond pays, based on its face value.

Debt-Equity Ratio

A financial proportion indicating the use of debt versus equity in the capital structure for asset financing.