When the Salesperson from R

question 10

Multiple Choice

When the salesperson from R.W.Hunt & Sons,a distributor of rifles and other items needed for hunting or target practice,calls on retail sporting goods stores,she is authorized to offer the retailers a 15 percent discount from the list price in recognition of activities retailers perform for the distributor.These activities include unpacking,floor display setup,and a repair service.What is this 15 percent discount called?

• A) a trade discount
• B) a quantity discount
• C) a promotional allowance
• D) a channel allowance

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Definitions:

Equity Financing

The method of raising capital by selling company shares to investors; in return, investors receive ownership interests in the company.

Capital Gains

The increase in value of an asset or investment above its purchase price, realized upon the sale of the asset.

Clientele Effect

A theory suggesting that the types of investors attracted to certain stocks or dividends policies can affect the stock price or policy sustainability.

Dividend Policy

Guidelines a company follows to decide how much it will pay out to shareholders in dividends.