The ________ Is Utilized to Value Preferred Stock

question 121

Multiple Choice

The ________ is utilized to value preferred stock.

• A) capital asset pricing model
• B) arbitrage pricing model
• C) zero-growth model
• D) Black-Scholes model

---

Definitions:

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales activity, such as rent, salaries, or insurance, remaining constant regardless of business operations.

Contribution Margin

The difference between sales revenue and variable costs, showing how much sales contribute to covering fixed costs and generating profit.

Variable Costs

Expenses that fluctuate with changes in production volume or service levels, such as materials and labor costs.

Fixed Costs

Payments for rent, salaries to employees, and insurance coverages that stay the same, no matter the production or sales figures.