Which Statement Is True

question 9

Multiple Choice

Which statement is true?

• A) An investment center is responsible for revenues and expenses as well as earning a return on assets.
• B) An investment center is only responsible for its investments.
• C) An investment center is only responsible for revenues and expenses.
• D) A profit center is evaluated using contribution margin while an investment center is evaluated using ROI.

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Definitions:

Ex-Rights Date

The first trading day when a security is offered for sale in the marketplace without the entitlement to a previously declared rights offering.

Rights Offering

An option for existing shareholders to buy additional shares directly from the company at a pre-determined price, usually at a discount, as a way to raise capital.

Value of a Right

The theoretical value of a subscription right, which allows existing shareholders to purchase additional shares at a discount before the new shares are offered to the public.

Initial Public Offering (IPO)

The first sale of a company's stock to the public, transitioning the company from private to public to raise equity capital.