equity does not represent the market value of the company
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Respond Anna's criticism that shareholders’ equity does not represent the market value of the company
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- Respond to Jerry’s criticism that shareholders’ equity does not represent the marketvalue of the company. What information does the balance sheet provide?Which of the following statements is CORRECT? Select one: a. Conflict of interest between shareholders and managers is not possible. b. By definition, the agency problem can only take place in corporations but not in proprietorships and partnerships. c. Conflict of interest between shareholders and bondholders is not possible. d. Managers always work to maximize the long-run value, and therefore the price, of their company stocks. This is exactly what shareholders desire.Explain in full detail why the following statement is false: "Financial managers should not focus on the present stock value of the company. Instead, they should focus on the profitability of the company. Doing so will result in increasing the value of the stock.
- 17. Which of the following is not a reason why companies are not always entirely clear on their dividend policy? A. For fear of giving away sensitive information. B . In order to maintain a managerial advantage over shareholders. C. Because they do not know how much is available for dividends. D. Companies have different abilities to communicateIt is an axiom that may be characterized by managers making decisions that conflict with the best interest of the shareholders. a. the risk-return trade-off b. the agency problems c. the curse of competitive markets d. stockholders versus managersWhat is the possible agency conflict between inside owner/managers and outside shareholders? What are some possible agency conflicts between borrowers and lenders? How is it possible for an employee stock option to be valuable even if the firm’s stock price fails to meet shareholders’ expectations?
- Why would managers misrepresent the financial results oftheir companies?Is this statement true or false? Give a reason for your answer. " Relevant or not, frequent changes in dividend policy can harm a firm."Identify the term being referred to: A theory that states that how high or low an entity pays out dividends does not affect the decisions of investors. *
- The corporate valuation model cannot be used unless a company pays dividends. a. True b. FalseExplain the links between stock price, intrinsic value, and executive compensation Discuss the importance of business ethics and the consequences of unethical behavior.Which of the following objectives of the company creates immoral practices such as: corrupt practice, unfair trade practice, etc.? Select one: A. None of the given options B. Profit Maximization C. Welfare Maximization D. Wealth Maximization
