The Sarbanes-Oxley Act (SOX)was Passed as a Response to Which

question 22

Multiple Choice

The Sarbanes-Oxley Act (SOX) was passed as a response to which of the following events?

• A)The savings & loan scandals of the 1980s.
• B)The bust of dot-com bubble companies such as pets.com and Webvan.
• C)Corporate reporting scandals by companies such as WorldCom,Enron,and Tyco.
• D)Securities manipulation and insider trading in the 1930s.

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Definitions:

Common Stock Split

A division of a company's existing shares into multiple ones to boost the liquidity of the shares, making them more affordable to small investors without altering the shareholder's equity.

Return on Equity

A financial ratio calculated by dividing net income by shareholder equity, used to measure the profitability of a company in generating profit from its equity investments.

Debt-to-Equity Ratio

This ratio measures the mix of shareholders' equity to debt in financing a company's assets.

Dividend Yield

A fiscal metric indicating the annual dividend payout by a company compared to its share price.