If a Firm Sells Common Stock to the Public for the Very

question 49

Multiple Choice

If a firm sells common stock to the public for the very first time, it is known as _____.

• A) an underwriting
• B) an initial public offering
• C) a financial intermediation
• D) an origination

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Definitions:

Depreciation Rate

A percentage rate used to calculate the decrease in value of an asset over time for accounting and tax purposes.

Units-of-Activity

A depreciation method that allocates the cost of an asset over its useful life based on the units it produces or hours it operates.

Straight-Line Depreciation

is a method of depreciating an asset where the asset's cost is evenly spread over its useful life, resulting in equal depreciation expenses each year.

Double-Declining-Balance

An accelerated method of depreciation which doubles the straight-line depreciation rate, applying it to the declining balance of the asset's cost.