A Major Function of Incentive Payments, Guarantees, and Signals Is

question 225

Multiple Choice

A major function of incentive payments, guarantees, and signals is to enable markets to overcome the problem of

• A) irrational forecasting.
• B) efficient forecasting.
• C) private information.
• D) public information.

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Definitions:

Dividend Yield

A financial metric that illustrates the proportion of dividends a company distributes annually compared to its share price.

Book Value

The net value of an asset as recorded on the balance sheet, calculated as the asset's cost minus accumulated depreciation.

Debt-to-equity Ratio

The debt-to-equity ratio is a financial leverage indicator that compares a company's total liabilities to its shareholder equity.

Times Interest

This refers to the times interest earned (TIE) ratio, a financial metric used to measure a company's ability to meet its debt obligations with its earnings before interest and taxes (EBIT).