equity does not represent the market value of the company

Q: What is the impact of decrease in assets or increase in liabilities resulting in decreases in…

A: when the assets reduces, the profits of the company also tends to fall. there can be no chance of…

Q: The Principal-Agent Problem arises A) because managers have little incentive to work in the…

A: The principal-agent problem is the problem that arises due to a conflict of interest between the…

Q: is(are)the reason(s) for profit maximization not a reasonable goal for firms. a. Profit concept…

A: Profit Maximisation Concept aims at carrying out the business activities in such a way that the…

Q: The objectives of financial management are Select one: O a. None of the options O b. Profit…

A: Financial or money management is done to maximize wealth in long term and profit in short term…

Q: why is profit maximization supposedly not the most important goal of a company

A: Profit Maximization: The process of raising the profit earning capacity of the business is known as…

Q: What conflicts of interest can arise between managers and stockholders?

A: Stockholders also knowns as shareholder is an individual, firm, or institution which owns at least…

Q: Owners equity is not cash; it is not a liability: and it generally is not equal to the current worth…

A: Owners’ equity generally referred to as shareholders equity, it is the net amount that the equity…

Q: The agency problem is A. a result of the separation between management and owners of the firm. not…

A: 3. Agency problem refers to the conflict between management and shareholders. As per this theory,…

Q: What can be said about a firm whose owners’ equity is a negative amount? How could such a situation…

A:

Q: What are the TWO primary advantages of using CAPM over DDM?  It adjusts for risks It does not…

A: As per Dividend Discount Model,P0= D1 / (ke-g)WhereD1 = Expected Dividendke = Expected Returng…

Q: Which of the following activity of the company shows that the company management has NOT dealt with…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: Although the equity method is a generally accepted accounting principle (GAAP), recognition of…

A: The equity method has been criticized due to the fact that it allows the investors to recognize the…

Q: Accounting Just because the gross profit margin is positive does not mean that a company will be…

A: Ratio analysis is a tool that establishes a relationship between the different items. It is used to…

Q: .theory would deduce that corporate growth causes an increase in shareholder remittance .

A: The answer to this part is (d) Positive Accounting

Q: How can a company expand itself out of existence, and how can this be avoided as a financial…

A: Introduction: Finance managers are accounting professionals who are concerned with the financial…

Q: Identify the term being referred to: A theory that states that how high or low an entity pays out…

A: Solution:- There are two theories related to dividend-  Dividend relevance theory and dividend…

Q: 6. Business risk is that type of risk in which: a) The company is unable to meet its financial…

A: Types of risk consist of financial risk, operational risk and business risk.

Q: If the revenues are correctly reported and the gross profit of a company is understated, what is the…

A: There would be effect on the retained earnings on stockholders' equity if the gross profit is not…

Q: Explain whether the following statement is true or false: Only weak companies issuedebentures.

A: A long-term liability that is issued by a company with a fixed interest rate to raise the fund for…

Q: Explain the effect on the company's financial statements if a company switches from the historical…

A: A historical method is the accounting principle method in which the asset is recorded at the…

Q: Which of the following user groups would be interested in the company's dividend policy and…

A: Dividends are distribution of profits or retained earnings by a corporate entity to its…

Q: Respond to Jerry’s criticism that shareholders’ equity does not represent the marketvalue of the…

A: Balance sheet: This financial statement reports a company’s resources (assets) and claims of…

Q: What is the implication of managerial entrenchment: should company favor debt or equity? Why?

A: Managerial entrenchment theory-says that allotment of shares inside the organization such as…

Q: Should companies retain dividends in the firm to protect employment and investments?

A: Retaining dividend is a part of the profit that is not given to the shareholder in fact it is held…

Q: hat does it mean when a company has zero net income but its stock price has increased? How do you…

A: Equity method: The equity method is used to record the profit earned by a company by investing in…

Q: What may be stated about a business whose equity is negative? How did such a scenario arise?

A: Investors use shareholders' equity, which is shown on a company's balance sheet, to assess a…

Q: When total shareholders' equity has a negative balance, it is described in financial statement as O…

A: The shareholders' equity represents the total equity that belongs to the owners.

Q: The cost of equity is the rate associated with what the shareholders expect the corporation to earn…

A: Equity refers to the amount contributed by the owners of a entity i.e. shareholders of a entity.

Q: In times of crisis companies are often seen to be paying stable dividends. The question however is,…

A: Introduction: Dividend is a part of profits which is distributed among its shareholders. In the…

Q: Explain what "financial distress" means. Let's say that a company is in financial difficulties, and…

A: Introduction: Financial Distress is defined as a scenario in which a company's obligations, such as…

Q: The accounting assumption or principle of __________________ is being violated if a company that is…

A: The Full Disclosure Principle states that all relevant and necessary information must be included…

Q: Companies cannot as a general rule reduce the capital of the business. However, there may be a class…

A: Share capital is the capital which has been contributed by the shareholders of the company by the…

Q: People cannot invest in companies. True or false

A: The term company refers to a separate legal entity that has the right to continue its operations.…

Q: Which of the following statements relating to financial statements is true? A. Financial statements…

A: Financial statements are those statements which are prepared at the end of the period in order to…

Q: The corporate valuation model cannot be used unless a company pays dividends. a. True   b. False

A: The corporate valuation model beginnings with determining the estimation of the assets or resources…

Q: The shareholders' equity figure on a balance sheet represents

A: Shareholder are the owner of company they have ownership of company.

Q: A change in the company's income taxes   Changing the selling price of a com

A: In business, net income refers to the amount of money left over after all expenses have been paid,…

Q: Examine the key reasons why a business may not want to hold too much or too little working capital.…

A: The key reasons why a business wants to hold efficient working capital is discussed below:…

Q: the advantages and disadvantages of a sole trader with a company as a choice of business structure.…

A: Entity which is structured as a sole trader is one in which a single owner is responsible for all…

Q: On Introduction to financial management Statement I: Profit maximization is a short-term goal. It…

A: Financial management included activities related to planning, organizing, and monitoring the…

Q: ing are some of the factors that influence the market price of a corporation: I. Industry…

A: Step 1 These internal and external factors can be used by investors to anticipate stock prices.…

Q: Although the equity method is a generally accepted accounting principle (GAAP), recognition of…

A: Equity Income This is the amount earned through stock dividends  by  investors on dividend-paying…