Theoretically, market values of assets are better for evaluating the creation of shareholder wealth than accounting numbers, but accounting numbers are used because they are more readily available. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Managers should not be concerned with business ethics because ethical behavior is inconsistent with the primary goal of maximizing shareholder value. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The vast majority of corporate bond business takes place over the counter. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
One of the problems associated with maximization of total current stock value is that it ignores the timing of a project’s return. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Changes in depreciation expense do not affect operating income because depreciation is a non-cash expense. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Financial markets exist in order to allocate savings in the economy to the demanders of those savings. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The risk-return trade-off is seen in many areas of finance. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Giving the company’s CEO stock options as part of his or her compensation package is an example of an agency cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Earnings available to common shareholders represents income that may be reinvested in the firm or distributed to its owners. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Each purchase occurring in the secondary markets increases the total stock of financial assets that exist in the economy. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
