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121If a company's managers NOT owners of the company, they

Question : 121If a company's managers NOT owners of the company, they : 1405471

 

 

121If a company's managers are NOT owners of the company, they are
Aoutsiders.
Bdealers.
Cagents.
Dbrokers.

 

122The conflict between the goals of a firm's owners and the goals of its nonowner managers is
Aof little importance in most large U.S. firms.

Bincompatibility.

Cserious only when profits decline.

Dthe agency problem.

 

123The agency problem may result from a manager's concerns about any of the following EXCEPT
Ajob security.
Bcompany-provided perquisites.

Ccorporate goals.
Dpersonal wealth.

 

124Agency costs include all of the following EXCEPT
Aopportunity costs.
Bmonitoring expenditures.

Ccost of goods sold.
Dbonding and structuring expenses.

 

125Agency costs include all of the following EXCEPT
Apurchasing insurance against management misconduct.

Bmanagement reports to stockholders.

Cthe cost of monitoring management behavior.

Dperformance incentives paid to managers.

 

126One way often used to insure that management decisions are in the best interest of the stockholders is to
Atie management compensation to the performance of the company's common stock price.

Bthreaten to fire managers who are seen as not performing adequately.

Cremove management's perquisites.

Dtie management compensation to the level of earnings per share.

 

127The amount earned during the accounting period on each outstanding share of common stock is called
Anet profits after taxes.
Bnet income.

Ca common stock dividend.
Dearnings per share.

 

128The goal of profit maximization would result in priority for
Acash flows available to stockholders.
Bearnings per share.

Ctiming of the returns.
Drisk of the investment.

 

129Profit maximization does NOT take into consideration
Aeps and stock price.
Brisk and eps.

Ccash flow and stock price.
Drisk and cash flow.

 

130Profit maximization as the goal of the firm is NOT ideal because 
Acash flows are more representative of financial strength.

Bprofit maximization does not consider risk.

Cprofits are only accounting measures.

Dprofits today are less desirable than profits earned in future years.

 

 

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