Which of the following is true concerning managerial incentives to disclose information?
A) More information increases uncertainty about financial performance.
B) More disclosure increases the cost of capital, causing stock prices to fall.
C) Information disclosure is usually neutral.
D) More information usually helps managers get better access to external capital.

Question

Quizplus · Accepted Answer

More information usually helps managers get better access to external capital, as investors and creditors are more likely to provide funding to companies that provide comprehensive and transparent information about their financial performance and operations. This can lower the cost of capital and increase the availability of funding opportunities for the company. A and B are incorrect because more information typically reduces uncertainty and enhances market efficiency, leading to a more accurate assessment of financial performance and a better allocation of resources. C is incorrect because information disclosure has significant positive or negative effects, depending on the nature and quality of the information disclosed.

Which of the Following Is True Concerning Managerial Incentives to Disclose