Simple Majority Voting Sometimes Leads to Projects Being Undertaken Whose

question 110

Multiple Choice

Simple majority voting sometimes leads to projects being undertaken whose costs are greater than the benefits.How is this possible?

• A) It is not possible,unless the voting results are rigged.
• B) Because voters have no way to express the intensity of their preferences.
• C) Because many voters choose to be rationally ignorant.
• D) Because free riding is pervasive.

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Definitions:

Date of Declaration

The date on which a company's board of directors announces a dividend payment to shareholders.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains unchanged.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuing company.

Retained Earnings

Retained earnings represent the cumulative amount of net income earned by a company that is retained by the company rather than distributed to its shareholders as dividends.