One Common Reason for Issuing Two Distinct Classes of Common

question 97

Multiple Choice

One common reason for issuing two distinct classes of common stock is to:

• A) sell different classes to increase profits.
• B) allow one stock to increase in price while the other class declines.
• C) restrict voting privileges from some shareholders.
• D) conserve cash by offering dividends to only one class of stockholders.

Understand the factors that affect break-even points and how changes in these factors impact the break-even analysis.

Calculate break-even points in units and dollars under various scenarios, including changes in fixed costs, variable costs, and selling prices.

Identify the relationship between fixed costs, variable costs, selling price, and their impact on the break-even sales volume.

Analyze the implications of changing cost structures and pricing strategies on the break-even analysis.