A Busy Professor Can't Decide Whether to Stay in His

question 12

Multiple Choice

A busy professor can't decide whether to stay in his office to grade papers for another hour or to go home and go to bed. This is an example of:

• A)equity versus efficiency.
• B)how one person's spending is another person's income.
• C)economic incentives.
• D)marginal analysis.

---

Definitions:

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, usually with fixed dividends.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements and is used to evaluate the cost of funding projects via equity financing.

Dividend

A disbursement by a company to its shareholders, often from its profit reserves.

Growth Rate

The rate at which a company's earnings, revenue, or another financial metric increases over a specific period.