Chapter 16 : Unit Pricing Flashcards
1
Q
What is the appropriation price?
A
The amount of money that the company should put into the fund in respect to each unit it creates in order to preserve the interest of the existing unit-holders
Appropriation price = (Market offer price + Expenses)/ Number of units
2
Q
Explain the difference between bid and offer price
A
Offer price - price that you buy at (price at which they offer for us to buy something)
Bid price- price that can sell for (price we put on the market waiting for someone to buy)
3
Q
What is the expropriation price?
A
The amount of money that a company should take out of the fund in respect to each unit it cancels in order to preserve the interest of continuing unit-holders
Expropriation price = (Market bid price-expenses)/Number of units
