Which of the Following Is Not a Reason for a Company

question 20

Multiple Choice

Which of the following is not a reason for a company making a bonus issue of shares?

• A)To use cash.
• B)As a signal to the market of the company's confidence in its future.
• C)To reduce its share price when it has become too high.
• D)None of the above, i.e., all are reasons for making a bonus issue.

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Definitions:

Marginal Cost

The additional financial burden incurred when one more unit of a good or service is produced.

Positive-Sum Game

In game theory, a game in which the gains (+) and losses (−) add up to more than zero; one party’s gains exceed the other party’s losses. A strategic interaction (game) between two or more parties (players) in which the winners’ gains exceed the losers’ losses so that the gains and losses sum to something positive.

Positive Payoffs

Benefits or gains that are realized from an investment or action, often assessed in terms of profitability or value added.

Players

Individuals or entities actively involved in a process or activity, often used in the context of games, sports, or markets.