Which of the following statements is false?
A) If management does not consider the needs of the bondholders of a firm, they could end up destroying shareholder value.
B) In a perfect capital market, if a firm's current capital structure is not optimal, one can expect that firm to be a takeover target.
C) Management should focus only on the needs of a firm's shareholders since they are the true owners of the firm and, as such, they elect the firm's directors.
D) If management chooses to ignore the needs of bondholders when structuring a firm, the firm can be expected to have to pay a higher interest rate on its debt.
Correct Answer:
Verified
Q5: Why might you expect longer-term debt issues
Q6: Agency conflicts that exist in the real
Q7: In Modigliani and Miller's perfect world,
A)capital structure
Q8: Which of the following statements is true?
A)In
Q9: The M&M dividend proposition states that
A)the higher
Q11: A firm can be worth $60 million
Q12: In which of the following scenarios is
Q13: The term "ex-ante" means
A)without just cause.
B)before the
Q14: A firm can be worth $110 or
Q15: Which of the following statements is true?
A)Bond
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents