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QUESTION 1 a) What are some actions that stockholders can take to ensure that management's and stockholder's interests are aligned? (Smarks) b) Explain the following

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QUESTION 1 a) What are some actions that stockholders can take to ensure that management's and stockholder's interests are aligned? (Smarks) b) Explain the following statement: While the balance sheet can be thought of as a snapshot of a firms financial position at a point of time, the income statement reports on operations over a period of time. (Smarks) Why is it sometimes misleading to compare a company's financial ratios with those of other firms that operate in the same industry? (5marks) d) Explain whether the following statement is true or false: Only weak company's issues bond or debt. (Smarks) Why might it be rational for a small firm that does not have access to the capital markets to use the payback period method rather than the NPV method? (5 marks) (Total: 25 marks)

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