Which of the Following Are NOT Ways Risk Management Can

question 10

Multiple Choice

Which of the following are NOT ways risk management can be used to increase the value of a firm?

• A) Risk management can increase debt capacity.
• B) Risk management can help a firm maintain its optimal capital budget.
• C) Risk management can reduce the expected costs of financial distress.
• D) Risk management can help firms minimize taxes.
• E) Risk management can allow managers to defer receipt of their bonuses and thus postpone tax payments.

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Definitions:

Mutual Goals

Mutual goals are objectives shared by parties in a collaborative effort, where success benefits all involved.

Organizational Outcomes

Refers to the results or effects of business activities, including financial performance, employee satisfaction, and customer satisfaction, among others.

Leaders

Individuals who guide, influence, or direct others towards achieving goals, often demonstrating vision, motivation, and decision-making capabilities.

Collective Leadership

A leadership model in which responsibilities and decision-making are distributed among multiple people or groups rather than centralized in a single leader.