To Adjust for Stock Splits

question 30

Multiple Choice

To adjust for stock splits

• A)the exercise price of the option is reduced by the factor of the split and the number of options held is increased by that factor.
• B)the exercise price of the option is increased by the factor of the split and the number of options held is reduced by that factor.
• C)the exercise price of the option is reduced by the factor of the split and the number of options held is reduced by that factor.
• D)the exercise price of the option is increased by the factor of the split and the number of options held is increased by that factor.
• E)none of the above

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Definitions:

Fixed-Period Inventory

A system of inventory management where stock levels are reviewed at set intervals and orders are placed as needed.

Economic Order Quantity

is a formula used to determine the optimal order size that minimizes the sum of ordering, holding, and stockout costs.

Inventory Carrying Costs

The total cost associated with holding inventory, including storage, handling, depreciation, and opportunity costs.

Capital Costs

Expenses incurred to create or acquire fixed assets, such as buildings or machinery, that are used in producing goods or services.