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:

Labor Cost

The total amount of money paid for employee wages, benefits, and taxes by a business.

Variable Overhead Efficiency Variance

The difference between the actual and expected (or standard) use of variable overheads based on the actual activity levels.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies directly with the level of production, such as utility costs for machinery.

Particular Product

Refers to a specific item or product line that a company manufactures or sells.