Q839
Type of stock in which dividends are tied to any particular part of a firm is classified as
A.
dividend stock
B.
firm part stock
C.
tied stock
D.
tracking stock
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Type of stock in which dividends are tied to any particular part of a firm is classified as tracking stock. A tracking stock is an equity issued by a parent company that tracks the financial performance of a particular division. Tracking stocks trade in the open market separately from the parent company's stock. Gains or losses in the tracking stock price are based only on the division's performance