Long-Term Contracts Are Generally Preferable To

question 109

Multiple Choice

Long-term contracts are generally preferable to:

• A) spot markets.
• B) short-term contracts.
• C) vertical integration.
• D) None of the statements is correct.

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Definitions:

Legal Capital

is the portion of a company's equity that cannot legally be distributed to shareholders and is meant to protect creditors.

Cash Dividends

Cash distributions from a corporation to its shareholders, representing the profit share paid out.

Shares Reacquired

Securities that were previously sold to the public and then bought back by the issuing company.

Originally Issued

Refers to securities or financial instruments that are provided to investors directly from the issuer for the first time.