You Currently Own 80 Shares of XYZ Stock That Is

question 77

Multiple Choice

You currently own 80 shares of XYZ stock that is selling for $40 a share. If the firm grants you an additional 4 shares, then the firm has declared a:

• A) stock dividend of 5%.
• B) cash dividend of $1 per share.
• C) stock repurchase of 5%.
• D)cash dividend of $1.60 a share which you reinvested in shares.

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Definitions:

Marginal Cost (MC) Curves

Graphs showing the cost of producing one additional unit of a good, illustrating how the cost varies with the level of output.

Diminishing Returns

A rule in economics that holds that after reaching a certain level, further investments in a specific sector will not yield higher returns if all other conditions stay the same.

Law of Demand

The economic principle stating that as the price of a good increases, demand for that good will decrease, and vice versa.

Marginal Cost (MC) Curve

A graphical representation showing how the cost to produce one additional unit of output changes as production volume increases.