Which of the following statements is true?

 Which of the following statements is true?
A. The Principle of Capital Market Efficiency says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs.
B. The Behavioral Principle suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law.
C. The Signaling Principle says to consider any possible change in capital structure carefully, because financing transactions and capital structure changes convey information to outsiders and can be misunderstood.
D. all of these

 

Solution

Which of the following statements is true?

 Which of the following statements is true?
A. Soft capital rationing refers to the rationing imposed externally by limited funds for borrowing from outside sources.
B. Hard capital rationing refers to the rationing imposed internally by the firm.
C. A post audit is a set of procedures for evaluating a capital budgeting decision after the fact.
D. all of these

 

Solution

Which of the following statements is true?

Which of the following statements is true?
 A.  A call option analyzes conflicts of interest and behavior in a principal-agent relationship.
 B.  The difference between the value of one action and the value of the best alternative is called an opportunity cost.
 C.  An agent-manager can never make bad decisions.
 D.  A security is a claim issued by a firm that pays owners interest but not dividends.

 

Solution

Which of the following statements is true?

Which of the following statements is true?
A. Soft capital rationing refers to the rationing imposed externally by limited funds for borrowing from outside sources.
B. Hard capital rationing refers to the rationing imposed internally by the firm.
C. A post audit is a set of procedures for evaluating a capital budgeting decision after the fact.
D. all of these

 

Solution

Which of the following statements is true?

Which of the following statements is true?
A. The difference between the value of one action and the value of the best alternative is called an opportunity cost.
B. An agent-manager can never make bad decisions.
 C. A security is a claim issued by a firm that pays owners interest but not dividends.
D. A call option analyzes conflicts of interest and behavior in a principal-agent relationship.

 

Solution

Which of the following statements is true?

Which of the following statements is true?
a. The future value of an annuity would be greater if funds are invested at the beginning of each period instead of at the end of each period.
b. An annuity is a series of equal payments that are made, or received, forever.
c. The effective annual rate (APR) of a loan is higher the less frequently payments are made.
d. The future value of an annuity would be greater if funds are invested at the end of each period rather than at the beginning of each period.

 

Solution

Which of the following statements is true?

Which of the following statements is true?

A. A course of action can be legal but not ethical.
B. Practices that are ethical in the United States are considered ethical everywhere else in the world.
C. If something is legal, it is always ethical.
D. Practices that are legal in the United States are legal everywhere in the world.

 

Solution