What is the implication of managerial entrenchment: should company favor debt or equity? Why?

Q: How the corporate governance is useful for a company? O a. It maximizes the mismanagement of the…

A: ANswer -    Option C is Correct Option - C. It Maximizes the Share Prices of the Company .

Q: why there is material uncertainty in the company?

A: There are several problems which are faced by the companies for both internal sources and external…

Q: How could overconfidence affect the financial manager of the firm and the firm’s shareholders?

A: The company have the option to issue its equity shares to the public for raising capital or…

Q: Analyze the impact of external factors (i.e., external to the company) on a company’s financial…

A: PESTEL analysis is one of the most important tools used by businesses to understand the industry and…

Q: The amount and trend in gross profit is closely monitered by management in assessing the…

A: Gross Profit = Total Sales revenue - Cost of Goods sold Net Profit = Gross Profit - Operating…

Q: Why is it that the goal of financial management is maximization of shareholders’ wealth rather than…

A: Financial management is defined as the planning, organizing, directing, and also the controlling of…

Q: What are some actions an entrenched management might take that would harm shareholders?

A: Entrenched management basically means that the senior management has grown so powerful that they can…

Q: Although the equity method is a generally accepted accounting principle (GAAP), recognition of…

A: The equity method has been criticized due to the fact that it allows the investors to recognize the…

Q: What is one of the ways that accounting is used to direct and control the manager of a corporation?…

A: Accounting is referred to as a process under which the transactions of a company are recorded,…

Q: What are accruals? How much control do managers have overaccruals?

A: Accruals: Accruals are the revenues that are earned but not received, and expenses that are incurred…

Q: What goals might be persued by managers instead of maximization of shareholders wealth

A: Goals of financial management should be so articulated as to help achieve the objective of wealth…

Q: Why might one expect managers to act in shareholders' interests? Give some reasons.

A: Managers would act in shareholders’ interests as a result of they need a duty to act in their…

Q: to consider the so-called corporate social responsibilities in making inve

A: Investment decisions relate to how a business's funds areallocated among various assets for the…

Q: How will a company view working capital – positive, negative, or a necessary evil?

A: The difference between current assets and current liabilities is used to calculate working capital.…

Q: Making managerial pay contingent on measures of managerial and/or firm performance motivates them to…

A: Performance Base Pay: When compensation is based on the fact that the employee has achieved the…

Q: What do you meant by not for profit objective of the firm?

A: The sole purpose of any business organization is to earn profit. However, there are some…

Q: what does it mean to say that managers should maximize shareholders wealth subject to ethical…

A: Share- It is a unit of ownership in a company's capital. It entitles the shareholder to an equal…

Q: The decisions that financial managers make in companies differ according to the functions related to…

A: Financial Managers are the managers who are responsible for the maintenance, regulation, and…

Q: analyze

A: Profitability analysis refers to allocation of expenses & analyzing the profits or earnings of…

Q: How does past knowledge of profit and loss impact your perspective on company management?

A: This Question deals with how does past knowledge of profit and loss impact your perspective on…

Q: What does it mean to say that managers should maximize shareholders' wealth "subject to ethical…

A: The main focus of the manager should be maximizing the shareholder’s wealth. More profit indicates…

Q: How would non-financial performance indicators help to improve the performance of the company?…

A: Introduction: In its most basic form, non-financial performance metrics give information on a…

Q: What factors explain the differences in company performance in the same industry?

A: For firms within the same business sector like Mcdonalds, Starbucks, burger king, etc in the…

Q: Why are financial ratios so critical to managers when evaluating business performance

A: Financial Ratios: Financial ratios are used to evaluate firms' comparative strength by doing…

Q: How can the use of debt serve to discipline managers?

A: A debt in a capital structure is a liability for the company on which company is bound to earn as…

Q: Which of the following best describes the potential impact of business risk on Earnings Quality?…

A: Earnings Quality: The earnings quality or quality of earnings refers to the reliability with which a…

Q: Describe earnings quality and how it is impacted by management practices to alter reported earnings.

A: Quality of earnings: It is referred to the amount of earning which is earned by higher sales or as a…

Q: Evaluate the following statements from an ethical perspective:“Earnings management in a narrow sense…

A: "Earnings management, in a narrow sense, is the behavior of management to play with the…

Q: How do the shareholders of an organization can encourage its manager to act in a way which is…

A: The primary objective of any organization is to increase shareholders wealth.  Wealth maximization…

Q: Agency theory suggests that one way to motivate managers to act in the best interests of the…

A: Here discuss about the details of the agency theory which act against disputes and problems which…

Q: how do compensation plans, including bonus structures, drive behavior?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What role do nominal rigidities play in the analysis of business cycle models?

A: The business cycle model shows the fluctuations in a nation's aggregate output and employment over…

Q: How do the managers estimate the opportunity cost of capital for a company?

A: The cost of capital is the opportunity cost (or best alternative rate of return) for the assets…

Q: Why is it important to understand the economic systemunder which a company operates before entering…

A:

Q: Which one of the following characteristics of the positive accounting theory brings forward the…

A: Positive accounting theory (PAT) means to understand and predict the choice of accounting policies…

Q: Why should a financial decision maker such as a corporate treasurer or CFO be concerned with market…

A: The financial decisions of the business include the raising of funds from different sources and the…

Q: What are the conflicts between shareholders and managers

A: Shareholders are real owners of company as they hold proportion of common stock in company but due…

Q: Although the equity method is a generally accepted accounting principle (GAAP), recognition of…

A: Equity Income This is the amount earned through stock dividends  by  investors on dividend-paying…