In 2012, the Public Debt in the U

question 100

Multiple Choice

In 2012, the public debt in the U.S. on a per capita basis was about:

• A) $100,000
• B) $38,000
• C) $75,000
• D) $52,000

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Definitions:

Required Rate of Return

The required rate of return is the minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.

After-Tax Cost of Debt

The interest expense on debt adjusted for taxes, showing the actual cost of debt financing after considering the tax shield.

WACC

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