The First Thing Managers Should Do Before Deciding Whether to Change

question 44

Multiple Choice

The first thing managers should do before deciding whether to change to a team-based organization is to

• A)conduct a feasibility study.
• B)establish the leadership for the change.
• C)determine whether competitors are using teams.
• D)prepare for implementation.
• E)develop a steering committee.

Determine a company's leverage and risk through debt-to-equity ratio, equity multiplier, and times interest earned ratio.

Understand the implications of earnings per share, price-earnings ratio, dividend payout ratio, and dividend yield ratio.

Calculate and interpret the book value per share.

Analyze investment ratios such as the dividend payout ratio and the dividend yield ratio.

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Definitions:

Initial Margin

The portion of the purchase price that an investor must deposit when buying securities on margin, serving as a form of collateral.

Initial Investment

The amount of money used to start a business venture, acquire an asset, or invest in a financial product.

Short 100 Shares

The selling of 100 shares that are not currently owned, with the expectation of buying them back at a lower price for a profit.

Initial Margin

The minimum amount of capital required to open a new position in the market, designed as a security for the broker against potential losses.