The Main Difference Between a Transfer at Undervalue and a Preference

question 57

Multiple Choice

The main difference between a transfer at undervalue and a preference is that

• A)a transfer at undervalue involves an assignment, whereas a preference only involves a proposal.
• B)a transfer at undervalue involves a transfer of property by the debtor for little or no value, whereas a preference gives preferential treatment to a particular creditor.
• C)a transfer at undervalue involves a payment of money, whereas a preference involves other types of property.
• D)a transfer at undervalue involves the Bankruptcy Court, whereas a preference involves the trustee.
• E)a transfer at undervalue must be in writing, but a preference can be done orally or by conduct.

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Definitions:

Free Cash Flow

The amount of cash generated by a company after accounting for operating expenses and capital expenditures.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Indirect Method

A way of calculating cash flows from operating activities by adjusting net income for changes in non-cash working capital items.

Free Cash Flow

The cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets.