Question: i need help in these questions please. Question 1 (Marks: 1) Which of the following costs is an example of indirect agency costs? Pick the
i need help in these questions please.
Question 1 (Marks: 1) Which of the following costs is an example of indirect agency costs? Pick the choice which applies best. a. $100,000 on hiring external auditors to audit top managements financial activities. b. $1,000 on purchasing office supplies for the board of directors. c. $500,000 on investing in a sub-optimal investment, ex-ante known by the top management. d. $70,000 was paid to the CEO as the management compensation. e. $2,000 per night hotel expenses on a business trip. Question 2 (Marks: 1) Which following factor or factors will increase the present value of a perpetuity? i. lowering the discount rate ii. reducing the cash flow amount iii. reducing the future value of the cash flow Select one: a. i, ii, and iii b. i and ii c. ionly d. i and iii e. ii only Question 3 (Marks: 1) Suppose there is a financial security (zero-bond) that will pay back $2,000 in five years from today (no coupon payments in the meantime). All else constant, for a given nominal interest rate, a change from quarterly compounding to monthly compounding will cause the current price of this security to ? Select one: a. Remain the same. b. Decrease. c. Increase. d. None of the following possibilities. e. Either increase or decrease depending on the number of years until the money is to be received
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