Which of the Following Will Be a Source of Cash

question 2

Multiple Choice

Which of the following will be a source of cash flows for a shareholder of a certain stock?
I. Sale of the shares at a future date
II. The firm in which the shares are held paying out cash to shareholders in the form of dividends
III. The firm in which the shares are held increasing the total number of shares outstanding through a stock split

• A) I only
• B) II only
• C) I and II
• D) II and III

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Definitions:

Price-elasticity-of-demand Coefficient

A measure that calculates the responsiveness of the quantity demanded of a good to a change in its price.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded, typically downward sloping.

Widgets

A hypothetical or generic manufactured good often used in economic models and discussions.