Which of the Following Is the Best Example of an Organizational

question 111

Multiple Choice

Which of the following is the best example of an organizational buyer?

• A) a mother buying milk for her young son
• B) a computer programmer buying the latest game for his PlayStation 3
• C) a store owner buying hand-painted slate signs to sell in her store
• D) a botanist buying a rose bush for his home garden
• E) a parent buying a softball glove for a daughter

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Definitions:

Dividend Preference Theory

A theory suggesting that investors prefer dividends from current earnings over potential capital gains because of the perceived certainty of dividend payments.

Bird in Hand

A theory in finance that suggests investors prefer the certainty of dividend payments to the potential for future capital gains.

PE Ratio

The Price to Earnings Ratio, a metric used to evaluate the valuation of a stock by dividing its current share price by its earnings per share.

EPS

Earnings Per Share, a company's profit divided by its number of outstanding shares of stock, indicating the company's profitability.