Which of the following statements is correct? AS long as managers stay within th

Question

Which of the following statements is correct? AS long as managers stay within the law, there is way te-fore ond stockholders best interests b. Becaune of their simplitied organication, it is easier for stsips and esins to g amounts of outs de capeal t it is corporations. and shareholders equally prefer Pal mar, invest in safer projects with ow potential returns as opposed to riskier projects with Nigher expected retures The primary operating poal of a publicly-owned firm merested in wvmg nso_s the long-run intrinsic value of the firm d. performance Which of 2. Economic value added and market value added are two ways to measure managera the following statements about economic value added (EVA) is comect way to increase EVA is to achieve the same level of operating income, but with lssinvestor supplied Capital b. If a firm reports positive net income, its EVA must also be positive. c. One drawback of EVA as a performance measure is that it mistakeny d. EVA measures managerial performance since the inception of the-n,-MVA on effectiveness during a specific year

Explanation / Answer

answering only the first one as these are separate and independen questions.

1) option d is correct

modern financial management is concerned with sharehoders wealth maximization.

a) is wrong because stock based incentives are one method to do this.

b) it is difficult for partnerships and proprietorships to raise outside capital. It is easier for public companies to do that.

c) bondholders prefer short low risk projects. Equity holders prefer long term more riskier projects.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.