Finance

A corporate financial manager trying to maximize shareholder value A)

A corporate financial manager trying to maximize shareholder value A) is not concerned with ethics but rather with writing iron-clad contracts. B) is concerned with ethics because unethical behavior destroys trust, and businesses cannot function without a certain degree of trust. C) must behave ethically in order to stay out of jail. D) can safely […]

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Date: September 19th, 2020

Two companies have identical assets and operating activities. Which of

Two companies have identical assets and operating activities. Which of the follow statements is true? A) The company with more debt will have lower operating income due to interest expense. B) Both companies have the same net income. C) The company with more debt will have higher operating income due to leverage. D) The company […]

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Date: September 19th, 2020

Project A is expected to generate positive cash flow of $1 million in

Project A is expected to generate positive cash flow of $1 million in 10 years while Project B is expected to generate $500,000 in 5 years. Therefore A) Project B may be preferred to Project A if the opportunity cost of money is high enough. B) Both projects have equal value because they average $100,000 […]

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Date: September 19th, 2020

All of the following statements about agency problems are true EXCEPT

All of the following statements about agency problems are true EXCEPT A) Agency problems result from the separation of management and the ownership of a firm. B) Agency problems interfere with the goal of maximizing shareholder value. C) Agency costs are paid by the managers who do not act in the shareholders’ best interest. D) […]

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Date: September 19th, 2020