If Ferdinand Prefers a Big Mac to a Whopper and a Whopper

question 50

Multiple Choice

If Ferdinand prefers a Big Mac to a Whopper and a Whopper to a hotdog, but is indifferent between a Big Mac and a Quarter Pounder he must

• A) prefer a Quarter Pounder to a hotdog.
• B) prefer a Whopper to a Quarter Pounder.
• C) be indifferent between a Quarter Pounder and a Whopper.
• D) be indifferent between a Whopper and a hotdog.

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Definitions:

Cumulative Preferred Stock

A type of preferred share that has the feature where omitted or unpaid dividends are accumulated and must be paid out before dividends can be issued on the company's common shares.

Common Shareholders

Individuals or entities that own common shares in a corporation, granting them rights to dividends and corporate decisions.

Paid-In Capital

The total amount of cash and other assets paid into the company by investors in exchange for shares of stock.

Retained Earnings

Retained earnings are the portion of a company's profits that is held or retained and saved for future use, investment, or to pay debt.