Other Things Being Constant, When a Business Issues More Stock

question 76

Multiple Choice

Other things being constant, when a business issues more stock, what happens?

• A) The supply of the stock is greater and thus the price will fall.
• B) The supply of the stock is less and thus the price will rise.
• C) The demand for the stock is greater and thus the price will rise.
• D) The demand for the stock is less and thus the price will fall.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.

Transactions

Financial activities that involve the exchange of assets, services, or liabilities between two parties.

Ledger

An accounting book or computer file for recording and totaling economic transactions measured in terms of a monetary unit and categorized by account type.

Account Titles

Names given to the accounts that reflect the types of transactions they represent, used in bookkeeping to distinguish financial records.