A Piece of Wood Is Floating in a Bathtub

question 19

Multiple Choice

A piece of wood is floating in a bathtub.A second piece of wood sits on top of the first piece,and does not touch the water.If the top piece is taken off and placed in the water,what happens to the water level in the tub?

• A) It goes up.
• B) It goes down.
• C) It does not change.
• D) This cannot be determined without knowing the volume of the top piece of wood.

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Definitions:

Earnings Per Share

A financial ratio that measures the portion of a company's profit allocated to each outstanding share of common stock, indicating the company’s profitability.

Cash Dividends

Cash distributions to shareholders from a company's earnings.

Preferred Stock

A class of ownership in a corporation with a priority claim on assets and earnings before common stock; typically does not have voting rights but has a fixed dividend.

Capital Stock

The total amount of stock, both common and preferred, that a company is authorized to issue according to its corporate charter.