After a Stock Split of 2-1, Each Investor Will Have

question 89

True/False

After a stock split of 2-1, each investor will have one-half of the percentage ownership in the firm that he had before the split.

Understand the basic principles of cost-volume-profit (CVP) analysis.

Identify variable, fixed, and mixed costs and their implication on the break-even point and overall profitability.

Calculate the contribution margin ratio and understand its significance in CVP analysis.

Determine the break-even point in units and dollars.

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Definitions:

Unit Elasticity

A situation in which the percentage change in quantity demanded or supplied is equal to the percentage change in price.

Total-revenue Curve

A graphical representation showing how the total revenue of a firm changes as the quantity sold of its product varies.

Linear Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, characterized by a straight line.

Unit Elastic

A situation where a change in price leads to an equivalent proportional change in quantity demanded or supplied.