Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A)Most companies see retained profits as the least likely source of finance.
• B)The law quite clearly specifies the size of the non-distributable portion of capital a firm must hold back.
• C)Preference capital redeemed by a company is always held in retained profits.
• D)A company is not allowed to acquire and hold its own shares.

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Definitions:

Herfindahl Index

A measure used to calculate the size of firms in relation to the industry and an indicator of the amount of competition among them; higher values indicate lesser competition.

Concentration Ratio

A measure used in economics to assess the level of competition in an industry by calculating the market share of the largest firms.

Internet Search Industry

A sector of the economy that involves companies which provide technologies and services for searching information on the Internet.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a targeted audience.