BUS 420 Study Guide - Final Guide: Income Statement, Takeover, Debt Ratio
20 Jul 2020
School
Department
Course
Professor
Document Summary
Chapter 1: an agency relationship exists when one or more persons hire another person to perform some service but withhold decision-making authority from that person. False: an agency problem exists between stockholders and managers. A second agency problem arises between stockholders and creditors. Statements b and c are correct (the threat of takeover is one way in which the agency problem between stockholders and managers can be alleviated; Increasing the threat of corporate takeover: the primary goal of a publicly-owned firm interested in serving its stockholders should be to. Maximize the stock price per share: a moral hazard problem arises when: False: if a firm has a single owner, we may say that the proper goal of a financial manager would be to maximize the firm"s earnings per share. False: executive stock options are shares of stock awarded to managers on the basis of corporate performance.
