When the Overwhelming Majority of Investors Would Be Willing to Pay

question 23

Multiple Choice

When the overwhelming majority of investors would be willing to pay more for the shares of a well-governed company,___________ is improved.

• A)financial innovation
• B)regulatory arbitrage
• C)private placement
• D)capital productivity

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Definitions:

Rational Decisions

Choices made by individuals that align with their own self-interest and are based on an evaluation of the costs and benefits of the action.

Marginal Costs

The extra financial burden of generating one additional unit of a good or service.

Marginal Benefits

The incremental satisfaction or advantage obtained from the consumption of an additional unit of a good or service.

Marginal Cost

Marginal cost is the increase in total production cost that arises from producing one additional unit of a good or service.