Corporations have come to dominate the business world through their ability to raise large amounts of capital by sale of ownership shares to anonymous outside investors. Is this true or false?
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Corporations have come to dominate the business world through their ability to raise large amounts of capital by sale of ownership shares to anonymous outside investors. Is this true or false?
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- How is an investment banker compensated for promoting and facilitating the sale of a company’s shares to the public?Explain the Threat and Opportunity of Shareholder Activism ? Explain the Effect of Executive Compensation on the Cost of Equity? Why Corporate Governance Is Important to Investors?Firms raise capital from investors by issuing shares in the primary markets. Does this imply that corporate financial managers can ignore trading of previously issued shares in the secondary market?
- Which one of the following statements is TRUE? a. Creditors have a claim on a firm's earning stream through the dividend payments they receive. b. One tool of corporate governance is a company's tax avoidance strategy. c. One tool of corporate governance is stock repurchases. d. One tool of corporate governance is how the company's charter affects the likelihood of a takeover. e. One tool of corporate governance is choosing a good investment banker.Which of the following statements is NOT CORRECT? When a corporation’s shares are owned by a few individuals who own most of the stock or are part of the firm’s management, we say that the firm is “closely, or privately, held.” “Going public” establishes a firm’s true intrinsic value and ensures that a liquid market will always exist for the firm’s shares. Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. When stock in a closely held corporation is offered to the public for the first time, the transaction is called “going public,” and the market for such stock is called the new issue market.The corporation is the most effective form of business organization because the corporation has: Select one: a) easier access to financial capital through selling bonds and stocks b) an unlimited liability toward the stock owners c) the problem of double taxation with respect to the corporate income d) a lot of skilled and semi-skilled labourers e) more freedom of action with respect to management
- It is frequently stated that the one purpose of the preemptive right is to allow individuals to maintain their proportionate share of the ownership and control of a corporation.a. How important do you suppose control is for the average stockholder of a firm whose shares are traded on the New York Stock Exchange?b. Is the control issue likely to be of more importance to stockholders of publicly owned or closely held (private) firms?A corporation might have treasury stock listed on their financials for all the following reasons except: A. they wish to control the market price B. they wish to be a majority stockholder C. they wish to limit dividend payments D. they wish to avoid takeoverWhich of the following is not an advantage of the corporate form of business? a. limited liability b. easy transferability of shares c. enhanced ability to raise capital d. lack of government regulation
- The cost of equity is the rate associated with what the shareholders expect the corporation to earn in order for that shareholder to maintain ownership in the company. True / FalseWhich of the following characteristics is an advantage of the corporate form of business? a. Separation of ownership and management b. Higher degree of government regulation c. The potential to raise large amounts of capital d. Double taxationCorporate managers sometimes use dividends as a tool for communicating with the market. Discuss.
