Ethical decision making in business()
A. reduces the firm’s profits
B. requires adherence to implied rules as well as written rules
C. is not in the best interests of shareholders
D. is less important than good capital budgeting decisions
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Liquidity is important to a mutual fund because()
A. a fund that is less liquid will attract more investors
B. the fund’s shareholders may want to redeem their shares at any time
C. the fund’s managers need liquidity to trade actively
D. the fund needs to distribute payouts to its shareholders and managers periodically
The term “capital structure” refers to()
A. the manner in which a firm obtains its long-term sources of funding
B. the length of time needed to repay debt
C. whether the firm invests in capital budgeting projects
D. which specific assets the firm should invest in
What happens to the market value of a firm’s equity as the book value of the firm’s equity increases()
A. It increases by the same amount
B. It decreases by the same amount
C. It remains constant
D. There is no set relationship to determine this outcome
A company can pay for its expansion in all the following ways except()
A. by using the earnings generated from its sale of obsolete equipment
B. by persuading the director’s mother to make a personal loan to the company
C. by purchasing bonds in the secondary market
D. by selling stock certificates for a new subsidiary