Which of the Statements Below Is FALSE

question 62

Multiple Choice

Which of the statements below is FALSE?

• A)If an investor purchases 20% of the initial issue of the company,the investor then owns 20% of the company,given the one vote-one share norm.
• B)After an initial offering,the company can sell more shares to the public at a later date.If the investor who originally purchased 20% does not purchase 20% of the subsequent issue,his or her ownership is diluted below 20%.
• C)A preemptive right enables one to maintain one's proportional level of ownership.
• D)A preemptive right is never particularly valuable to shareholders with large ownership percentages.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard hourly wage rate.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual production achieved.

Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or budgeted) cost, based on standard rates and actual hours worked.