The Entity That Is Responsible for Establishing the Allocation and Cost

question 5

Multiple Choice

The entity that is responsible for establishing the allocation and cost of capital is/are

• A) the corporation.
• B) the economy.
• C) investors.
• D) customers.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after subtracting liabilities, representing the ownership interest of shareholders.

Corporation

A business organized under state or federal statutes as a separate legal entity.

Stock Split

A corporate action to increase the number of shares by dividing each share, which decreases its price and makes it more accessible to investors without changing the market capitalization.

Market Value

The ongoing cost at which a commodity or service is available for buying or selling in the market.