The Value of a Stock Depends on the Ability of the Company

question 153

True/False

The value of a stock depends on the ability of the company to generate dividends and the expected price of the stock when the stockholder sells her shares.

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Definitions:

Sales Tax

A tax on sales or on the receipts from sales, typically added to the purchase price by the seller.

Gross Profit

The difference between revenue and the cost of goods sold before deducting overhead, payroll, taxation, and interest payments.

Selling Expenses

Expenses that are incurred directly in the selling of merchandise.

Periodic Inventory

A system in which the inventory is physically counted at certain periods and the cost of goods sold is calculated thereafter.