Which One of the Following Is Generally Not a Reason

question 59

Multiple Choice

Which one of the following is generally not a reason for issuing tracking stocks?

• A) To give investors a "pure play" in a specific business owned by the parent
• B) To create a currency for the business to acquire other firms
• C) To enhance the likelihood that the business will be acquired
• D) To create an incentive for management receiving the stock
• E) To raise capital for the parent or for the business for which the tracking stock is created

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Definitions:

Economic Analysis

A systematic approach to examining the allocation of resources, focusing on the production, distribution, and consumption of goods and services.

Rent-Seeking Activities

Efforts to increase one's own wealth without producing new wealth, often through manipulating the political environment to obtain economic gains such as subsidies or tariffs.

Market Adjustments

Changes in the supply, demand, and prices within a market in response to external factors or internal disruptions.

Economic Inequality

The unequal distribution of income and opportunity between different groups in society.