The Risk in a Transactional Function Refers to

question 4

Multiple Choice

The risk in a transactional function refers to

• A)unpredictable costs of transportation because of fuel prices.
• B)product liability from poorly produced products that become defective.
• C)the need to stock merchandise in anticipation of sales.
• D)trying new promotional campaigns.
• E)investments in new-product development.

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Definitions:

Preferred Stock

A class of stock that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Annual Dividend

The total amount of money paid to shareholders from a company's profits over the course of a year per share of stock.

Floatation Costs

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

Cost of Retained Earnings

The rate of return that shareholders expect on the earnings that a company keeps and reinvests in its operations.