Which of the Following Is an Example of a Positive

question 59

Multiple Choice

Which of the following is an example of a positive statement?

• A)Workers with families should be paid at least the minimum wage.
• B)If crime rates were reduced, the world would be a better place in which to live.
• C)Marginal tax rates should be reduced for individuals in the highest tax brackets.
• D)An increase in the price of gasoline will cause a reduction in the amount purchased.
• E)Corrupt politicians ought to be voted out of office.

---

Definitions:

Equity

An ownership interest. The portion of a firm’s capital representing funds belonging to its shareholders. An equity investment is an investment in stock.

Capital Components

The various sources of funding that a company uses to finance its operations and growth, including debt and equity.

Capital Structure

The mix of the three capital components (debt, preferred stock, and equity) used by a firm. The optimal capital structure is the structure at which stock price is maximized, all other things held equal. Also see Target capital structure.

Equity

The value of an ownership interest in property, including shareholders' equity in a company.