True false 15 incentive compensation plans are used

Info icon This preview shows pages 2–5. Sign up to view the full content.

View Full Document Right Arrow Icon
True False
Image of page 2

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
15. Incentive compensation plans are used to attract and retain top managerial talent as well as to align the interests of management with shareholders. True False 16. The finance function is relatively independent of most other corporate functions. Marketing decisions, for example, might affect the firm's need for funds but are not affected by conditions in financial markets or other financing issues. True False 17. In a competitive marketplace, if managers deviate too far from making decisions that are consistent with stockholder wealth maximization, they risk being disciplined by the market. Part of this discipline involves the threat of being taken over by groups who are more aligned with stockholder interests. True False 18. The disadvantages associated with a proprietorship are similar to those under a partnership. One exception to this is due to the formal nature of the partnership agreement and the commitment of the partners' personal assets. As a result, partnerships do not have difficulty raising large amounts of capital. True False 19. The term multinational corporation is used to describe a firm that operates in two more countries. True False 20. Nations do not have the sovereignty to expropriate the assets of a firm without compensation. True False 21. Having the manager's compensation tied to the company's performance increases the agency problem that corporations face. True False 22. Managers of firms using accounting manipulations to inflate current earnings are likely to generate long- term benefits to the shareholders of the firm. True False
Image of page 3
23. A proprietorship is an unincorporated business owned by one individual and the owner benefits from the limited liability for business which limits his losses to what he has invested in the company. True False 24. The corporate charter is a document filed with the secretary of the state in which the firm is incorporated that provides information about the company, including its name, address, directors, and amount of capital stock. True False 25. Industrial groups are organizations comprised of companies in different industries with common ownership interests, which include firms necessary to sell and manufacture products. True False 26. The primary goal of a publicly-owned firm interested in serving its stockholders should be to A. Minimize the debt used by a firm. B. Maximize expected EPS. C. Minimize the chances of losses. D. Maximize the stock price per share. E. Maximize expected net income.
Image of page 4

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern