The Get-There-Safe Bus Company Incurs an Average Cost of $45

question 7

Multiple Choice

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga.In advance of a particular trip,four seats remain unsold.The bus company could increase its profit only if it

• A)charged any ticket price above $0 for the four remaining seats.
• B)charged at least $11.25 for each of the four remaining seats.
• C)charged at least $45 for each of the four remaining seats.
• D)paid four people to occupy the four remaining seats.

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Definitions:

Target Capital Structure

The mix of debt, equity, and other securities a company aims to hold to finance its operations and investments.

Retained Earnings

Profits that a company keeps or retains rather than distributing to shareholders in the form of dividends, typically used for reinvestment.

Retained Earnings

The portion of a company's profit kept in the business after dividends are paid, which can be used for reinvestment in operations, debt reduction, or other purposes.

Component Cost Of Preferred Stock

The required rate of return by investors on a company's preferred stock, essentially the cost to the company of issuing preferred stock.