Question 2 Financial managers should strive to maximize the current value per share of the existing stock because: doing so guarantees the company will grow in size at the maximum possible rate. the current stockholders are the owners of the corporation. doing so means the firm is growing in size faster than its competitors. doing so leads to full employment in the macro economy. Question 8 One of the major advantages of debt financing is Bondholders are usually easier to deal with than stockholders Debt is more liquid than equity financing The interest expense on debt is tax deductible for the corporation Stockholders are really greedy but bondholders are less greedy Question 13 What is meant by the term "double taxation?" It means there are taxes on corporate interest AND dividends It means there are taxes on corporate profits AND dividends It means there are taxes on corporate profits AND interest It means there are taxes on corporate profits AND losses Question 16 What is an agency relationship? An agency relationship develops when Maxwell Smart retires An agency relationship develops when a company goes bankrupt An agency relationship develops when a company sells its products overseas An agency relationship develops when a principal hires an agent to work on the principal's behalf