Which of the Following Is Not a Reason for a Stock

question 112

Multiple Choice

Which of the following is not a reason for a stock redemption?

• A)desire by remaining shareholders to retain control
• B)desire by shareholders to reduce the corporate tax liability
• C)Redemption of shares is a good corporate investment.
• D)No outside market exists for the stock.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Average Variable Cost

The total variable costs of production divided by the number of units produced, measuring the cost per unit that varies with output level.

Marginal Costs

The increase in total cost that arises from an extra unit of production.

Average Variable Costs

The total variable costs (costs that change with output level) divided by the quantity of output produced.