When Discounting Dividends You Should Use

question 26

Multiple Choice

When discounting dividends you should use:

• A)the weighted average cost of capital.
• B)the after-tax weighted average cost of capital.
• C)the equity cost of capital.
• D)the before-tax cost of debt.

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Definitions:

Tenth Amendment

A change to the U.S. Constitution specifying that any powers not assigned to the federal government or banned by the Constitution from the states belong either to the state governments or to the citizens.

State Sovereignty

The concept that states possess independent authority and the right to govern themselves without external intervention, within their territorial boundaries.

Printz v. United States

A United States Supreme Court case that decided it was unconstitutional for the federal government to command states' law enforcement officers to enforce federal laws.

Gibbons v. Ogden

A landmark 1824 U.S. Supreme Court case that ruled the power to regulate interstate commerce was granted to Congress by the Commerce Clause of the Constitution.