Emma Owns a Firm That Produces Umbrellas

question 111

Multiple Choice

Emma owns a firm that produces umbrellas. Currently, Emma produces 2,500 umbrellas a day. Emma cannot produce more umbrellas in a day unless she purchases another machine or else hires more workers. Emma is ________ efficient.

• A)economically
• B)economically and technologically
• C)technologically
• D)not
• E)capital and labour

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Definitions:

Rights Offering

A corporate event in which a company offers existing shareholders the opportunity to buy additional shares directly from the company at a discounted price, typically to raise capital.

Subscription Agreement

A contract between a company and investors for the purchase of shares in a private placement.

Dilution

The reduction in existing shareholders' ownership percentage of a company due to the issue of new shares.

Shareholders' Value

The value delivered to shareholders because of management's ability to grow earnings, dividends, and share price.