Jensen and Meckling showed that __________ can assure themselves that the __________ will make optimal decisions only if

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Jensen and Meckling showed that __________ can assure themselves that the __________ will make optimal decisions only if appropriate incentives are given and only if the __________ are monitored.
A. Principals; agents; agents
B. Agents; principals; principals
C. Principals; agents; principals
D. Agents; principals; agents


Answer : A


Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?
A. EPS maximization ignores the firm's risk level
B. EPS maximization does not specify the timing or duration of expected EPS
C. EPS maximization naturally requires all earnings to be retained
D. EPS maximization is concerned with maximizing net income


Answer : D


Which of the following is not a perquisite (perk)?
A. Company-provided automobile
B. Expensive office
C. Salary
D. Country club membership


Answer : C


What is the most important of the three financial management decisions?
A. Asset management decision
B. Financing decision
C. Investment decision
D. Accounting decision


Answer : C


How are earnings per share calculated?
A. Use the income statement to determine earnings after taxes (net income) and divide by the previous period's earnings after taxes. Then subtract 1 from the previously calculated value
B. Use the income statement to determine earnings after taxes (net income) and divide by the number of common shares outstanding
C. Use the income statement to determine earnings after taxes (net income) and divide by the number of common and preferred shares outstanding
D. Use the income statement to determine earnings after taxes (net income) and divide by the forecasted period's earnings after taxes. Then subtract 1 from the previously calculated value


Answer : B