Saved Debt financing offer advantages up to a point: Multiple Choice beyond which investors will assign a lower P/E ratio to depress the stock price, beyond which lenders may perceive a lower risk for the firm. beyond which investors will assign a higher P/E ratio to bring up the stock price beyond which investors remain indifferent about the financial leverage work: Chapter 5 =https%253: Saved Financial leverage refers to: Multiple Choice the amount of cash flows exhibited on the balance sheet. the amount of capital assets amortized by the firm the amount of debt employed in the firm the amount of fixed assets employed in the firm k: Chapter 1 =https%253A Saved The financial markets allocate capital to corporations by: Multiple Choice relying on the opinion of investment dealers. rewarding companies with expected high returns with lower relative stock prices. requiring higher returns from companies with lower risk than their competitors. reflecting expectations of the market participants in the corporation's share price. Saved Agency theory would imply that conflicts are more likely to occur between management and shareholders when: Multiple Choice management acts in the best interests of maximizing shareholder wealth. the company is owned and operated by the same person the chairman of the board is also the chief executive officer (CEO). the board of directors exerts strong and involved oversight of managers Saved The increasing percentage ownership of public corporations by institutional investors has: Multiple Choice taken away the voice of the individual investor created more pressure on public companies to manage their firms more efficiently had no effect on corporate management 5 created higher returns for the stock market in general Saved A financial manager's goal of maximizing current or short-term earnings may not be appropriate because: Multiple Choice increased earnings may be accompanied by acceptably higher levels of risk earnings are subjective, they can be defined in various ways such as accounting or economic earnings it considers the timing of the benefits share ownership is widely dispersed Prov 6 of 10 !!! Next > Saved Which of the following is not a major area of concern and emphasis in modern financial management and in this text? Multiple Choice Marginal analysis Risk-return trade-off 5 Commodity trading Changing financial institutions