Profit maximization is NOT an adequate goal of the firm when making financial decisions because:
A) it does not necessarily reflect shareholder wealth maximization.
B) it ignores the risk inherent in different projects that will generate the profits.
C) it can over-emphasize a project's short-term returns.
D) All of the above.
D
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Which of the following sets includes only accounting assumptions and conventions?
A) timeliness, prudence, historical cost, and neutrality B) matching, comparability, period of time, and faithful representation C) monetary unit, going concern, relevance, and materiality D) monetary unit, entity, going concern, and recognition
The Theta of an option is defined as:
A) expected change in the option premium for a small change in time to expiration. B) expected change in the option premium for a small change in volatility. C) expected change in the option premium for a small change in the spot rate. D) expected change in the option premium for a small change in the domestic interest rate.
You believe WSU stock will pay dividends of $1.00, $1.25, and $1.50 at the end of each of the next 3 years. Immediately after receiving the third dividend, you will sell the stock for $28.50. If the appropriate discount rate is 12%,
you should be willing to pay $20.75 for this stock. Indicate whether this statement is true or false.
What is the distribution of the random variable X?
What will be an ideal response?