The Decline in the Use of Equity Finance and the Increase

question 56

Multiple Choice

The decline in the use of equity finance and the increase in corporate borrowings during the 1980s might be explained as an attempt by firms to

• A)avoid the strict regulations surrounding new issues of common stock.
• B)avoid adverse selection problems.
• C)disguise questionable expenditures from shareholders.
• D)mitigate principal-agent problems.

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Definitions:

Transformational Leadership

A type of leadership that inspires followers to transcend their own self-interests for the good of the organization or community.

Leadership Prototypes

Refers to commonly held mental images or expectations about the key characteristics, behaviors, and roles of leaders in various contexts.

Preconceptions

Pre-existing beliefs or opinions formed before having adequate evidence or experience, often influencing how new information is interpreted.

Leadership Prototypes

Preconceived notions or expectations about the qualities or behaviors that characterize an effective leader within a specific cultural or organizational context.