If a Company Retires Preferred Stock

question 96

Multiple Choice

If a company retires preferred stock:

• A)total stockholders' equity will decrease.
• B)total stockholders' equity will increase.
• C)the company can record a gain or loss on retirement of stock.
• D)the number of outstanding shares will go up.

---

Definitions:

Perfectly Elastic

Perfectly elastic describes a situation in which the quantity demanded or supplied can change infinitely in response to any change in price.

Imperfectly Competitive

Describes a market structure where the conditions necessary for perfect competition are not fully met, allowing firms some power to set prices.

Marginal Revenue Curve

A graphical representation that shows how additional revenue varies with changes in output.

Marginal Revenue

Enhanced earnings from selling an additional unit of a product or service.