Consolidated Cocoa Inc

question 17

Multiple Choice

Consolidated Cocoa Inc., a large chocolate manufacturing company, sells its shares directly to the public at $50 per share. Ron purchases 100 shares of the company. When the price of the shares goes up to $60, Ron decides to sell 50 shares. He approaches a broker who sells these shares to John at $60. This resale of the shares by the broker represents a sale in the _____ market.

• A) primary
• B) secondary
• C) reverse takeover
• D) initial public offering
• E) stock market launch

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Definitions:

Profitability

A measure of the efficiency of a company in generating profits from its revenue.

Unit Costs

Unit costs refer to the cost incurred by a company to produce, store, and sell one unit of a particular product or service.

Learning Curve Effects

The observed reduction in production costs and increase in efficiency as a company gains experience in manufacturing a product or providing a service.

Reliability

The degree to which an experiment, test, or measuring procedure yields the same results on repeated trials, indicating consistency and dependability.