September 21, 2018 Name The number one goal of any corporation should be; A. To

Question

September 21, 2018 Name The number one goal of any corporation should be; A. To maximize market share B. To pay steadily increasing dividends to shareholders C. To produce the highest possible operating profit D. To increase shareholder wealth 1. All publicly traded corporations endeavor to determine their Cost of Capital. That number is determined by the following equation. A. Interest costs less federal income taxes B. Cost of Equity plus Treasury Stock C. Cost of Equity plus Cost of debt D. Common Stock plus Preferred Stock 2. Give an example of an action that would increase short term profits but might erode the value of the company going forward and thereby its stock price (could be more than one). A. Issue a Christmas bonus to all employees B. Significant cutbacks in staffing levels. C. Moving to alternative, less expensive, raw materials D. Taking out a loan E. Issuing more stock 3. Which of the following are ways that a corporation can raise capital? (circle all that apply). A. 4. B. C. D. E. Take out a line of credit with a bank Pay dividends to shareholders Produce an operating profit Sell shares of stock Pay off an outstanding loan.

Explanation / Answer

1)Option D , as this is the major goal for any corportaion which set up
2)Option C. COst of capital is the cost associated with company raising money from outside
3)Option B
4)Option A and option D . Option A is form of debt and Option D is form of equity

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