A Producer of Automobile Batteries Notes That the Price of Batteries

question 20

Multiple Choice

A producer of automobile batteries notes that the price of batteries has risen over each of the past three years. The firm decides to expand its battery production. This illustrates

• A) the law of supply.
• B) the law of market price.
• C) the law of equilibrium.
• D) the law of demand.
• E) the law of supply and demand.

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Definitions:

Homemade Dividend

A strategy where investors create their own dividend stream by selling a portion of their portfolio of equities, as opposed to relying on company-issued dividends.

Ex-Dividend Date

The date on which a stock begins trading without the right to receive the next declared dividend, typically set one business day before the record date.

Convertible Bonds

Convertible bonds are a type of debt security that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.

Dividend Payment

The distribution of a portion of a company’s earnings to its shareholders, usually in cash or as additional stock.