QUESTION 16 1. 16. Default is a legal procedure where the assets of the firm are

Question

QUESTION 16 1. 16. Default is a legal procedure where the assets of the firm are transferred to the debt-holders. True False 2 points

QUESTION 17 1. 17. Agency problems exist when the company is owned and managed by an individual or group of individuals who work for their best interest, but reduce the value of the company through their actions. True False 2 points

QUESTION 18 1. 18. A company should continue to add debt to the capital structure, up to some point where the tax benefits are overcome by the burden of interest payments, in order to optimize the capital structure. True False 2 points

QUESTION 19 1. 19. At the first class meeting, six main principles of finance were discussed, which were underscored numerous times since the beginning. Explain the role of the Financial Manager in developing and working with each of these principles in the corporation.

Explanation / Answer

ANSWER 16 The statement given is TRUE. ANSWER 17 The statement given is TRUE. ANSWER 18 The statement given is FALSE. ANSWER 19 In what context is the question to be answered needs to be mentioned, since the principles of finance need to be enumerated, in order to discuss the same.

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