Winstead Co

question 73

Multiple Choice

Winstead Co.is authorized by its articles of incorporation to sell 50,000 shares of stock.The company:

• A) may not sell 55,000 shares under any circumstances.
• B) must sell the number of shares authorized by its articles of incorporation.
• C) would issue void securities for any shares the company purports to sell over the 50,000.
• D) must repay,with interest from the date of purchase,any purchaser of shares over 50,000.

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Definitions:

Opportunity Costs

The value of the best alternative forgone as a result of making a decision.

Widgets

A generic term used to refer to a hypothetical manufactured product or any small device or gadget.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Opportunity Costs

The value of the next best alternative foregone as a result of making a decision.