Finc 3131- Hw Chapter 1 Exam Questions (11 Terms) With Verified Definitions Updated 2024

Which of the following are effective means of aligning management goals with shareholder interests? I. Employee stock options II. Threat of a takeover III. Management bonuses tied to performance goals IV. Threat of a proxy fight - I, III, and IV only - I, II, III, and IV - I, II, and III only - I and III only - II and IV only {Ans: I, II, III, and IV}Capital budgeting includes the evaluation of which of the following? - Size, timing, and risk of future cash flows - Size of future cash flows only - Size and timing of future cash flows only - Risk and size of future cash flows only - Timing and risk of future cash flows only {Ans: Size, timing, and risk of future cash flows}The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict? - structural - formation - agency - organizational - territorial {Ans: agency}A corporation: - has its identity defined by its bylaws. - has its existence regulated by the rules set forth in its charter. - is ultimately controlled by its board of directors. - is a legal