01 EOC5351-1 - EOC535-1 Question MC #1 If a firm has a...

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EOC535-1 Question MC #1 If a firm has a single owner, we may say that the proper goal of a financial manager would be to maximize the firm's earnings per share. T/F? Question MC #4 The goal of maximizing stock price is a detriment to society in that few of the actions that result in maximization of stock price also benefit society. T/F? Question MC #8 Which of the following mechanisms is used to motivate managers to act in the interests of shareholders? a. Bond covenants. b. The threat of a takeover. c. Executive stock options. Question MC #9 Which of the following is an example of a moral hazard? a. A CEO is awarded $100,000 worth of executive stock options, which he exercises two years later for $1,000,000. b. A company borrows $1,000,000 for investment in equipment, but uses the money instead to repurchase stock. c. A company declares bankruptcy, but instead of being liquidated, it is reorganized and one set of bondholders who are owed $10 million accept $3 million in payment for the
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01 EOC5351-1 - EOC535-1 Question MC #1 If a firm has a...

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