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Multiple Choice Identify the choice that best completes the statement or answers the question 8. The primary goal of a publicly-owned firm interested in serving
Multiple Choice Identify the choice that best completes the statement or answers the question 8. The primary goal of a publicly-owned firm interested in serving its stockholders should be to a. Minimize the debt u by a firm b. Maximize expected EPS c. inimize the chances of losses. d. Maximize the stock price per share. 9. Which of the following statements is correct? a. A major disadvantage of a regular partnership or a corporation as a form of business is the fact that they do not offer their owners limited liability, whereas proprietorships do b. An advantage of the corporate form for many businesses is the fact the corporate tax rate always exceeds the personal tax rate, which is the rate at which proprietorships and partnerships are taxed. c. There are more partnerships and sole proprietorships than corporations in the U.S., but corporations produce more goods and services than do other forms of business. d. Because corporations enjoy the benefits of limited liability, easy transferability of ownership interest, unlimited life, and favorable tax status relative to the situation for partnerships and proprietorships, most large businesses choose to incorporate. 10. Which of the following statements concerning "agency problems" is most correct? a. Regardless of economic conditions, if a firm's stock price falls during the year, this indicates that the firm's managers must not be acting in the best interests ofthe shareholders. b. One method of controlling agency problems is to engage in the taking of "poison pills c. One of the best means to control agency problems is to require the managers and other important decision makers of the firm to also be owners of the firm d. Agency problems probably would not exist if the important decisions of a firm were made by persons who have no vested interests, such as ownership, in the firm
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