The Cost of Capital Is The

question 7

Multiple Choice

The cost of capital is the:

• A) component cost of debt.
• B) component cost of equity.
• C) both A and B
• D) discount rate.

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Definitions:

Producer Values

The set of ethical principles and standards that guide the behavior and practices of producers or manufacturers.

Buyer Surplus

Buyer surplus is the difference between the maximum amount a consumer is willing to pay for a good or service and the actual amount paid.

Producer Surplus

The difference between the amount producers are willing to supply a good for and the actual amount they receive (or market price).

Minimum Price

The lowest possible price at which a product or service can be sold, often regulated by governments to protect producers or consumers.