Exhibit 11-4 In the Past, 35% of the Students at ABC University

question 89

Multiple Choice

Exhibit 11-4
In the past, 35% of the students at ABC University were in the Business College, 35% of the students were in the Liberal Arts College, and 30% of the students were in the Education College. To see whether or not the proportions have changed, a sample of 300 students was taken. Ninety of the sample students are in the Business College, 120 are in the Liberal Arts College, and 90 are in the Education College.
-Refer to Exhibit 11-4. The expected frequency for the Business College is

• A) 0.3
• B) 0.35
• C) 90
• D) 105

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Definitions:

Specific Capital

This refers to the various types of capital (debt, equity, etc.) a company uses for financing its operations and investments, with each type having its own cost and characteristics.

Component Costs

The individual costs associated with the different sources of capital a firm utilizes in its capital structure.

Embedded Costs

Embedded costs refer to the expenses that a company has already incurred and cannot be recovered.

External Equity

Refers to funds raised through issuing shares of stock to outside investors, as opposed to internal financing through retained earnings.