When Comparing Common Stock of the Same Company, It Is

question 45

Multiple Choice

When comparing common stock of the same company, it is fair to say that

• A) all shares, no matter how many classes, are all created with the same equal rights.
• B) companies sometimes have two different classes of shares with unequal rights to dividends and votes.
• C) the Securities and Exchange Commission allows only one class of common stock.
• D) investors are indifferent between class A and class B shares.

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Definitions:

Price Breaks

Discounts or lower pricing offered by suppliers to buyers as incentives for purchasing larger quantities.

Safety Stock

A quantity of inventory maintained to guard against shortages or delays in supply or demand, acting as a buffer.

Stockouts

Situations where demand cannot be fulfilled because the inventory of a product is exhausted, often resulting in lost sales or customer dissatisfaction.

Inventory Carrying Costs

The total costs associated with holding inventory, including storage, handling, depreciation, and opportunity costs.