Which of the Following Should Be Accomplished by a New

question 53

Multiple Choice

Which of the following should be accomplished by a new owner who purchased an existing business?

• A)He or she should make all significant changes in one day so as to alleviate any lingering concerns by the employees.
• B)He or she should devise layoff plans taking enough time so that he or she obtains the goodwill of the employees.
• C)He or she should ensure the former owner comes to the business every day for at least 30 days following the sale.
• D)He or she should wait for at least 6 months before informing customers and suppliers of the sale of the business.

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Definitions:

Conversion Price

The predetermined price at which convertible security, such as a convertible bond or preferred stock, can be converted into a specified number of shares of common stock.

Conversion Value

The financial value of a convertible security if it is converted into a different form, typically shares of the issuing company's stock.

Call Option Contracts

Financial contracts that give the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Intrinsic Value

The actual, perceived, or calculated value of an asset, investment, or company based on fundamental analysis without reference to its market value.