The Right to Buy New Shares of Stock in Proportion

question 80

Multiple Choice

The right to buy new shares of stock in proportion to shares already owned is called a:

• A)stock right.
• B)shares option.
• C)Section 1244 right.
• D)pre-emptive right.

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Definitions:

Total Fixed Cost

An expenditure that does not change with the level of production or sales over a short period.

Average Variable Costs

The costs of labor, material, and other inputs that change with the level of production or sales volume.

Average Fixed Costs

The sum of all fixed production costs divided by the number of units produced.

Total Costs

The sum of all expenses a firm incurs in the production of goods or services, including both fixed and variable costs.