1. The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to a. Maximize its expected total corporate income. b. Maximize its expected EPS. c. Minimize the chances of losses d. Maximize shareholders' wealth (value), which translates into stock price maximization Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership? a. Less of a corporation's income is generally subject to taxes. b. Corporations generally find it easier to raise capital C. Corporate investors are exposed to unlimited liability. d. Corporations generally face fewer regulations. 3. Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders? a. Decrease the use of restrictive covenants in bond agreements. b. Take actions that reduce the possibility of a hostile takeover. C. Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries. d. Elect a board of directors that allows managers greater freedom of action. Which of the following best defines corporate governance? a. The hierarchical structure of the firm b. The rules and regulations set by foreign governments and the Federal Reserve System. C. The set of laws, rules, and procedures that influence a company's operations and the decisions made by its managers d. The processes the SEC and the Fed implement when a firm goes public. Which of the following factor(s) affect the price per share of a publicly traded company? a. projected cash flows to owners b. riskiness of the cash flows c. timing of the cash flows. d. all of the above