Two Common Measures of Operating Performance Are

question 18

Multiple Choice

Two common measures of operating performance are

• A) number of new product focus groups
• B) employee turnover and retention rates
• C) sales revenue and gross margin
• D) fuel costs and labour rates

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Definitions:

Floatation Costs

Expenses incurred by a company when it issues new securities, including underwriting fees, legal fees, and registration fees.

Required Rate of Return

The required rate of return is the minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.

After-Tax Cost of Debt

The interest expense on debt adjusted for taxes, showing the actual cost of debt financing after considering the tax shield.