If the MPS Is 0.3, the MPC Is

question 209

Multiple Choice

If the MPS is 0.3, the MPC is

• A) -0.3.
• B) 0.7.
• C) 1.
• D) 1.3.

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Definitions:

Unlevered Cost

The cost of an investment that does not take into account the effect of debt in the capital structure.

After-Tax Net

The net income of an individual or business after all taxes have been deducted, representing the amount of money actually available for spending or investment.

Corporate Tax

A tax imposed on the net income or profit of corporations and other businesses.

Unlevered Firm

A company that operates without any debt in its capital structure, relying entirely on equity for financing.