Which of the Following Statements Concerning Business Environment Conditions for a New

question 62

Multiple Choice

Which of the following statements concerning business environment conditions for a new business is true?

• A) State governments will help new business by levying taxes.
• B) Determining the zoning is important because it may limit a company's operations.
• C) Many states offer location incentives to attract jobs to very stable areas.
• D) Finding an area that has a low cost of living means a low standard of living for employees.

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Definitions:

Cost of Retained Earnings

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

Risk Premium

The extra return expected by an investor for holding a risky asset rather than a risk-free asset.

Flotation Costs

The costs incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Equity Capital

Funds raised by a company in exchange for shares of ownership in the company.