Business/Professional Ethics Directors/Executives/Acct
8th Edition
ISBN: 9781337485913
Author: BROOKS
Publisher: Cengage
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Ethical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock legally,thereby becoming a part owner of the company, shouldmanagement be allowed to entrench itself against thewishes of this owner? Explain your answer.
If an outside investor decides to invest in a company, which financial statement is more essential, the Balance Sheet or the Income Statement? Explain why you made the decision you did.
An associated person of a broker-dealer may only share directly or indirectly in the profit or losses in a customer account if certain
conditions are met. Which of these conditions do not apply in the case of an account shared with an immediate family member?
A The associated person must obtain prior written approval from the broker-dealer
B
C
D
The associated person must obtain prior written approval from the customer
The associated person must share in the profit and losses in direct proportion to financial contributions made by the associated person
None of these conditions apply in the case of an immediate family member
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- Which of the following is not true with a broker Select one: a. Safeguards the interests of the investor b. Is a middleman c. Maintains inventories and takes position of assets d. Buys and sells on behalf of investorarrow_forwardAre poison-pill defenses ethical? If a potential acquirer buys company stock legally, thereby becoming a part owner of the company, should management be allowed to entrench itself against the wishes of this owner? Explain your answer.arrow_forwardDescribe the difference between a right of first refusal, an option agreement and a buy-sell agreement. Which type of transfer restriction can guarantee a buyer for a shareholder's investment in the event of death, retirement or disability?arrow_forward
- What is preferable from the point of view of an investor? a. To value the business using the Asset Valuation method; or b. To value the business using the Equity Valuationarrow_forwardA friend who knows you study accounting approaches you to discuss share market investment strategies. They believe deciding which shares to invest in should be based solely on understanding the business model and reading analyst forecasts regarding the company. Is this strategy sound? Why or why not? What other approaches or tools would you recommend to assist in making investment decisions? Discuss.arrow_forwardSuppose you are relatively wealthy and are looking for a potential investment. You do not plan to be active in the business. Would you be more interested in investing in a partnership or in a corporation? Why or why not?arrow_forward
- If you were to invite investors to your business, who would they be and why? What are the possible sources of financing for your business venture?arrow_forwardExplain to a group of business students why a security is considered to be liquid and state its advantage to a investor.arrow_forwardWhat is the possible agency conflict between inside owner/managers and outside shareholders? What are some possible agency conflicts between borrowers and lenders? How is it possible for an employee stock option to be valuable even if the firm’s stock price fails to meet shareholders’ expectations?arrow_forward
- Eric is interested to invest in shares. However, he realizes there would be a risk if he invests in only similar industry. Identify and explain the concept that Eric should apply to encounter this risk.arrow_forwardDoes a firm's social presence need to be considered before an individual decides to invest? Why, or why not?arrow_forward46.When the economic method is used, the investor will recognize the investment income when: Select one: a. the company in which it invested reports income and the increase in the fair value of the investment. b. Receive dividends from the company you invested in. c. the company that invested reported income. d. the fair value of the investment has increased.arrow_forward
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