Select the Correct Statement from the Following

question 50

Multiple Choice

Select the correct statement from the following.

• A) A fixed cost structure offers less risk (i.e., less earnings volatility) and higher opportunity for profitability than does a variable cost structure.
• B) A variable cost structure offers less risk and higher opportunity for profitability than does a fixed cost structure.
• C) A fixed cost structure offers greater risk but higher opportunity for profitability than does a variable cost structure.
• D) A variable cost structure offers greater risk but higher opportunity for profitability than does a fixed cost structure.

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Definitions:

Record Date

The specific date set by a company on which the investors must own shares to be entitled to dividends.

Reverse Stock Split

A corporate action that consolidates the number of existing shares of stock into fewer, proportionally more valuable, shares.

Shares Outstanding

The sum of all shares of a company currently held by its investors, encompassing both large block holdings by institutional investors and shares that are under restrictions.