Capital Structure Decisions Include Consideration of The

question 34

Multiple Choice

Capital structure decisions include consideration of the:
I.amount of long-term debt to assume.
II.cost of acquiring funds.
III.current assets and liabilities.
IV.net working capital.

• A)I and II only.
• B)II and III only.
• C)III and IV only.
• D)I, II, and IV only.
• E)I, III, and IV only.

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Definitions:

Marginal Costs

Marginal costs represent the change in total production cost that arises when the quantity produced is incremented by one unit.

Perfect Price Discrimination

A pricing strategy where a seller charges the maximum price each consumer is willing to pay, capturing the entire consumer surplus.

Total Profits

The overall financial gain realized by a business after subtracting all operational expenses, taxes, and costs from total revenues.

Price-discriminating Monopolist

A monopolistic market player that charges different prices for the same product or service to different customers, based on what each is willing to pay.