Which One of the Following Is a Primary Market Transaction

question 5

Multiple Choice

Which one of the following is a primary market transaction?

• A)sale of currently outstanding stock by a dealer to an individual investor
• B)sale of a new share of stock to an individual investor
• C)stock ownership transfer from one shareholder to another shareholder
• D)gift of stock from one shareholder to another shareholder
• E)gift of stock by a shareholder to a family member

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered in depreciation calculations and asset disposal decisions.

Sunk Cost

Expenses that have already been incurred and cannot be recovered, and should not influence future business decisions.

Basic Overheads

The routine, essential expenses incurred in the operation of a business, such as rent, utilities, and salaries.

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health.