Question 11. Using stock price as our corporate finance objective supports which

Question

Question 11. Using stock price as our corporate finance objective supports which of the following?

Question 11 options:

Resource allocation

Deciding on how to finance investments

Cash deployment (dividends, deals, repurchase)

All of the above

Question 12. Which of the following is not true?

Question 12 options:

Transaction multiples are subjective and less frequent than stock price.

Stock price assumes investor's outlook is rational.

Stock price accurately reflects what will happen in the future.

Stock price fluctuates with changes in market and industry conditions and changing views about the cash flows that would accrue to the stock.

Question 13. Which of the following is not true with respect to corporate governance?

Question 13 options:

Public companies have the best access (amount, cost) to capital

Public companies have the longest strategic horizon (patience) relative to private or private equity ownership.

Public companies tend to have higher public accountability.

Public companies tend to have the most risk averse boards.

Question 14. Which of the following is not a reason that cash now beats cash in the future….

Question 14 options:

We prefer current to future consumption

Monetary inflation kills the value of paper currency

Monetary inflation supports the current value of paper currency

Promised cash flows may not show up

Question 15. Which of these is a noted economist of the "monetarist" school?

Question 15 options:

Adam Smith

Milton Friedman

John Maynard Keynes

Karl Marx

Resource allocation

Deciding on how to finance investments

Cash deployment (dividends, deals, repurchase)

All of the above

Explanation / Answer

11) d: all of the above( yes the stock price fulfills all the stated objectives)

12 c: Stock price cannot exactky and accuratel with 100% precision reflect what will happen in future, it can just provide an idea for the same

13) d: public companies are supposed to be less risky reliable and assured return ones.

14)d) promised cash flows may not show up is not justified , other factors are supportive and justifying the stated theory

15) milton friedman

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