The relationship between book value and market value cannot be predicted; hence, it would be possible for Apple stock to have book value of $44 billion on the firm's books, but have a much larger market value of $242 billion.

True

False

The Agency Theory proposed __________ as a solution for the potential problem of senior managers acting in their own self- interests, not in the interests of owners.

none of the above

large bonuses tied to revenue growth

high salaries regardless of the firm's financial performance

compensation in the form of stock or stock options

Financial managers tend to care more about the market value of an asset, rather than the accounting book value. This means that financial managers tend to care more about the market value of a stock than its book value.

True

False