An Example of an Issue of a Financial Security in the Primary

question 27

Multiple Choice

An example of an issue of a financial security in the primary market would be:

• A) the acquisition of shares in a company from an existing investor purchased on the ASX.
• B) shares arising as a result of a dividend reinvestment plan.
• C) shares arising from participating in a rights issue.
• D) both b and c

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Definitions:

Direct Materials Cost

The cost of materials that are an integral part of the finished product.

Units Produced

The total number of units of product a company manufactures over a specific period of time.

Fixed Cost

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.

Relevant Activity Base

A factor that directly influences the costs incurred during a business activity, used for allocating costs in activity-based costing.