Which of the Following Is Not the Case When Social

question 26

Multiple Choice

Which of the following is not the case when social costs are greater than private costs?

• A)The market's price signals are flawed.
• B)Resources are allocated efficiently.
• C)There is market failure.
• D)External costs exist.

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Definitions:

Rate of Return

The increase or decrease in the value of an investment, shown as a percentage of the original amount invested, over a given timeframe.

Floatation Costs

Flotation costs are the expenses incurred by a company in issuing new securities, including fees and commissions paid to underwriters, legal fees, and registration fees.

After-Tax Cost of Debt

This refers to the net cost of debt considering the effect of taxes, representing the actual financial cost of debt to a company after tax deductions.

Yield-to-Maturity

The total anticipated return on a bond if held until it matures, accounting for its current market price, face value, interest payments, and time to maturity.