Which one of the following statements is TRUE?
A. A manager not closing a factory that is losing money but which is in his hometown is an example of a manager-shareholder conflict.
B. Management is said to be entrenched when the senior managers are consuming excessive perquisites
C. A company's matching contribution to a retirement plan is a nonpecuniary benefit.
D. Company sponsorship of a local charity is an example of a nonpecuniary benefit.
E. A manager/shareholder agency conflict arises when shareholders sell their stock even though management says the stock is undervalued.
Answer: A
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Which one of the following statements concerning earnings per share amounts is true?
A) Earnings per share related to discontinued operations must be reported on the income statement. B) Earnings per share related to extraordinary items must be reported on the income statement. C) Earnings per share related to continuing operations must be reported on the income statement. D) Earnings per share related to the cumulative effect of a change in accounting principle must be reported on the income statement.
Discuss the presentation of long-lived assets in the balance sheet and income statement
A central reserve asset is any holding that has value that is held by private banks in case of a liquidity crisis.
Answer the following statement true (T) or false (F)
Based on the free cash flow valuation model, Bizzaro Co.'s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. Bizzaro has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?
A. $13.72 B. $14.44 C. $15.20 D. $16.00 E. $16.80