In the Cost-Plus Pricing Approach, the Desired ROI Per Unit

question 81

Multiple Choice

In the cost-plus pricing approach, the desired ROI per unit is computed by multiplying the ROI percentage by

• A) fixed costs.
• B) total assets.
• C) total costs.
• D) variable costs.

---

Definitions:

Optimal Distribution Policy

The distribution policy that maximizes the value of the firm by choosing the optimal level and form of distributions (dividends and stock repurchases).

Capital Gains

Capital gains are the profits realized from the sale of assets such as stocks, bonds, or real estate, which exceed the purchase price of these assets.

Stock Dividends

The payment of additional shares of a company to its existing shareholders instead of cash.

Stock Splits

A corporate action in which a company divides its existing stock into multiple shares to increase the liquidity of the shares, though the market capitalization remains the same.