In Periods of High Inflation

question 4

Multiple Choice

In periods of high inflation,

• A)people want to hold as much money as possible
• B)the purchasing power of money is increasing
• C)nobody wants to work and earn income
• D)high nominal interest rates are likely to result
• E)nobody wants to buy goods

Understand the organizations and standards that rate motor oil.

Recognize the currency and application of API oil ratings, including their correlation with ILSAC GF-5 ratings.

Identify severe service conditions and their implications for vehicle maintenance.

Know the standards and requirements for lubricants and coolants in European (ACEA), US, and other region-specific vehicles.

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Definitions:

Target Capital Structure

The ideal mix of debt, preferred stock, and common equity that a company aims to hold in order to minimize its cost of capital and maximize its value.

Floatation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees and registration fees.

WACC

Weighted Average Cost of Capital - a measure of a firm's cost of capital in which each category of capital is proportionately weighted.

WACC

stands for Weighted Average Cost of Capital, which is a calculation of a firm's capital cost from all sources, including equity and debt, weighted accordingly.