All of the Following Are True About an American Depository

question 1

Multiple Choice

All of the following are true about an American Depository Receipt EXCEPT:

• A) the depositary bank converts all dividends and other payments into U.S. dollars.
• B) there are no custodial fees.
• C) shares are held in custody by a U.S. depository bank.
• D) it represents a specific number of shares in the home market.

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Definitions:

Sales Required

The minimum sales needed to achieve a specific financial goal or to cover costs.

Variable Cost

Costs that vary directly with the level of production or output.

Break-even Point

The level of production or sales at which total revenues equals total expenses, with no net loss or gain.

Contribution Margins

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contributes to covering fixed costs and generating profit.