For a Corporation, Direct Investment from Owners Occurs When

question 22

Multiple Choice

For a corporation, direct investment from owners occurs when:

• A) it sells newly issued stock.
• B) its earnings are used for debt financing.
• C) it issues commercial paper.
• D) it pays dividend to its debenture holders.

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Definitions:

Idle Capacity

Unused production capability, where available resources such as machinery or labor are not fully utilized.

Financial Advantage

Refers to the benefit gained in financial terms, which could be through cost savings, revenue increase, or any other financial gain.

Special Discounted Price

A lower than the usual price offered on goods or services, typically for promotional purposes or to specific customer groups.

Milling Machines

A type of machine tool used to machine solid materials, such as metal, by removing material to form shapes.