If You Own 200,000 Shares of Stock in a Company

question 115

Multiple Choice

If you own 200,000 shares of stock in a company with 8 million shares outstanding and the company issues an additional 2 million shares to its employees through stock options,your ownership percentage:

• A)remains the same because the company now has more assets.
• B)falls from 2.5% to 2%.
• C)remains the same because the company now has fewer liabilities.
• D)increases because the company now has more stock outstanding.

Explain the effects of time and rate of interest on the future value of investments.

Illustrate the relationship between present value and future value through graphical representation.

Understand and calculate inventory turnover in a manufacturing plant.

Analyze the financial implications of operational decisions on company profit.

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Definitions:

Swiss Francs (CHF)

The currency of Switzerland, known for its strength and stability in the financial market.

Forward Contract

A non-standardized contract between two parties to buy or sell an asset at a specified future date at a price agreed upon today.

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery.

Sale Record

The documentation and reporting of the sale transaction details including the product or service sold, amount, and date of the sale.