Participative budgeting is an approach to budgeting that:
A. discourages budget slack.
B. is top-down in nature.
C. is more likely to motivate people to work towards the organization's goals than a top-down approach.
D. allows top management to set the budget.
Answer: C
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Bonds whose indentures contain a provision which gives the issuing company the option to retire portions of the bond issue before maturity if it so desires, but the provision does not require the company to do so are called _____ bonds
a. callable b. refunded c. sinking fund d. serial e. convertible
________ is the expected payout or value of a variable that has different possible states of nature, each with an associated probability
Fill in the blanks with correct word
Which of the following statements is a key assumption in the recruitment pipeline?
A. Delays in the timing of recruitment pipeline are perceived positively by candidates. B. A relatively small portion of applicants is truly outstanding, and a relatively small portion is unsatisfactory. C. Intervals between events in the pipeline proceed as planned. D. Time to fill an open requisition is insignificant in pivotal jobs for an organization.
As a newly hired financial analyst, your first job at VersaLife Corporation is to calculate the company's cost of capital
The present capital structure, which is considered optimal, is as follows: Market Value Debt $80 million Preferred Stock $10 million Common Equity $110 million Total Capital $200 million If VersaLife Corporation issues new debt, then the bond market expects a yield of 7.5%. Preferred stock is trading for $96, has a $100 par value and pays an annual dividend of 8% (the next dividend is due in one year). Common equity has a beta of 1.20, the market risk premium is 5%, and the risk-free rate is 3%. If the firm's tax rate is 40%, what is the weighted average cost of capital? Round answers to the nearest tenth. A) 7.2% B) 7.5% C) 8.2% D) 8.5% E) 9.0%