fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
E) Less reliance on partners.
157) Managers who place the interest of the shareholders first, will tend to:
A) Be replaced on a routine basis.
B) Decline all offers to buy the firm.
C) Realize minimal value from the stock options they are granted.
D) Reward employees for unethical behavior if that behavior increases the firm's net income.
E) Be in greater demand and receive higher compensation.
158) Which of the following is a type of agency cost?
A) The cost of an audit of the firm's financial statements.
B) The cost of a corporate jet needed to keep tabs on foreign operations.
C) Salaries paid to the firm's managers.
D) The costs of financing the firm.
E) The cost of buying insurance on the firm's assets.
159) Stocks that trade on an exchange are referred to as:
A) Primary stocks.
B) Optioned stocks.
C) SEC stocks.
D) Privately held stocks.
E) Listed stocks.
160) When one shareholder sells stock directly to another, the transaction is said to occur in the:
A) Dealer market.
B) Primary market.
C) Secondary market.
D) OTC market.
E) TSX market.
161) The articles of incorporation:
A) Can be used to remove company management.
B) Are amended annually by the company stockholders.
C) Set forth the number of shares of stock that can be issued.
D) Set forth the rules by which the corporation regulates its existence.
E) Can set forth the conditions under which the firm can avoid double taxation.
162) Complete this sentence: The bylaws…
A) establish the name of the corporation.
B) Are rules which apply only to limited liability companies.
C) set forth the purpose of the firm.
D) mandate the procedure for electing corporate directors.
E) set forth the procedure by which the stockholders elect the senior managers of the firm.
163) The secondary market is the market wherein:
A) one issuer exchanges securities directly with another issuer.
B) the government is either the buyer or the seller of the security.