Myers (2000) recognizes three imperfect solutions to the basic contracting problem between diffuse shareholders and management. Which of the following is NOT one of these solutions? a. dividends b. monitoring c. incentive compensation d. contingent shareholder intervention ANSWER D
Date: September 19th, 2020
TRUE or FALSE. The dollar value of aggregate share repurchases has grown relative to aggregate dividends in recent years. a. TRUE b. FALSE ANSWER A
Date: September 19th, 2020
A decrease in the current asset to total asset ratio will result in ________. A) an increase in risk B) a decrease in risk C) an increase in profit D) a decrease in profit ANSWER B
Date: September 19th, 2020
An increase in the current liabilities to total assets ratio will result in ________. A) an increase in risk B) a decrease in risk C) an increase in profit D) a decrease in profit ANSWER A
Date: September 19th, 2020
Over the years 1980-2000, most U.S. firms that have gone public have chosen the __ as their listing market. a. NYSE b. AMEX c. NASDAQ/OTC d. Bulletin Board ANSWER C
Date: September 19th, 2020
The firm’s monthly average seasonal funds requirement is ________. (See Table 14.1) A) $17,500 B) $57,500 C) $40,000 D) $157,500 ANSWER A
Date: September 19th, 2020
The firm’s monthly permanent funds requirement is ________. (See Table 14.1) A) $100,000 B) $57,500 C) $140,000 D) $157,500 ANSWER C
Date: September 19th, 2020
A well-documented anomaly associated with IPOs is evidence that IPOs other stocks in the aftermarket for up to 3 years. a. outperform b. underperform ANSWER B
Date: September 19th, 2020
Which of the following is NOT a theory that has been suggested to explain empirical evidence that IPOs are initially underpriced? a. litigation risk b. the winner’s curse c. signaling (i.e., strategic underpricing) d. the IPO market is inefficient ANSWER D
Date: September 19th, 2020
An decrease in the current liabilities to total assets ratio will result in ________. A) an increase in risk B) an increase in profit C) a decrease in risk D) a decrease in profit ANSWER C
Date: September 19th, 2020
