1. Which of the following statements is correct? 1. Shareholder wealth maximizat
ID: 2638343 • Letter: 1
Question
1. Which of the following statements is correct? 1. Shareholder wealth maximization may actually be beneficial for society in the long run. 2.Shareholder wealth maximization is achieved by maximizing market share. 3. Shareholder wealth maximization is achieved by maximizing sales. 4. Shareholder wealth maximization is achieved by minimizing costs
2. Unethical firm behavior include all of the following except:
maximizing shareholder value
mistreating employees
mistreating customers
financial misconduct
3. All of these statements will increase a firm's quick ratio.
Are obtained by dividing all income statement accounts by net sales and all balance sheet accounts by total assets.
Allow for easy comparison of balance sheets and income statements across firms in the industry.
Provide quantitative clues about the direction that the firm is moving.
All of the above.
4. Which of the following indices best reflects the ten sectors of the economy?
Dow Jones Industrial Average
Standard & Poor's 500
Nasdaq Composite
None of the above
5.Which of the following statements is incorrect?
Preferred stockholders have higher precedence for payment than common stockholders in firm liquidation if bankruptcy occurs.
Preferred stock prices fluctuate with market interest rates and behave like corporate bond prices.
Common stock price changes with the value of the company's underlying business.
Preferred stock is preferred because it always pays a higher return than common stock.
6. Which of the following activities will increase a firm's current ratio?
Purchase inventory using cash.
Accrued wages and taxes increase.
Accounts receivable are paid in cash.
Buy equipment with a short-term bank loan.
None of these statements will increase a firm's current ratio.
maximizing shareholder value
mistreating employees
mistreating customers
financial misconduct
Explanation / Answer
1c
2b
3b
4a
5d
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