Contract Terms That Adjust Downward the Par Value of Stock

question 17

Multiple Choice

Contract terms that adjust downward the par value of stock venture capitalists if the firm sells new stock

• A) Repurchase rights
• B) Ratchet provisions
• C) Demand registration rights
• D) Participation rights

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Definitions:

Marginal Product

The growth in output due to an extra unit of input.

Perfectly Competitive

A market structure where numerous small firms sell identical products, there’s free entry and exit, and no single firm can influence the market price.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good or service changes as production volume changes.

Variable Input

Any resource for which the quantity used in production can vary as the level of output changes.