MC$\mathrm{.}01\mathrm{.}024$

Solve

Which of the following statements is CORRECT?

a$.$ Potential agency problems can arise between managers and stockholders, because managers hired as agents to act on behalf of the owners may instead ma$.$ themselves rather than the stockholders.

b$.$ The financial manager should seek that combination of assets, liabilities, and capital that will generate the largest expected projected after$-$tax income over the generally the coming year.

c$.$ Large, publicly owned firms like IBM and GE are controlled by their management teams. Ownership is generally widely dispersed; hence managers have geat the firm. Managers may operate in stockholders' best interests, but they also may operate in their own personal best interests. As long as they stay within the lan either force or motivate managers to act in the stockholders' best interests.

d$.$ The riskiness inherent in a firm's earnings per share $($EPS$)$ depends on the characteristics of the projects the firm selects, and thus on the firm's assets. Howeve the manner in which those assets are financed.

e$.$ The financial manager's proper goal should be to attempt to rhaximize the firm's expected cash flows, since that will add the most to the individual shareholder