Trent Decides to Spend an Hour Playing Basketball Rather Than

question 38

Multiple Choice

Trent decides to spend an hour playing basketball rather than studying.His opportunity cost is:

• A) nothing because he enjoys playing basketball more than studying.
• B) the benefit to his grades from studying for an hour.
• C) the increase in skill he obtains from playing basketball for that hour.
• D) nothing because he had a free pass into the sports complex to play basketball.

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Definitions:

Premium on Common Stock

The amount by which the sale price of a share of common stock exceeds its par value.

Organization Expense

Costs incurred in the creation and organization of a corporation, such as legal fees, that may be amortized over time.

Stock Warrant

A financial instrument that gives the holder the right, but not the obligation, to buy a company's stock at a specific price before a certain date.

Par Preferred Stock

Preferred shares of stock issued at a specified nominal value, known as the par value.