Sales Teams Have Little Incentive to Report Low Sales Projections

question 91

True/False

Sales teams have little incentive to report low sales projections to their CEOs-predictions markets help to overcome this problem.

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Definitions:

Accounting Beta

A measure of the sensitivity of a company's operating income to changes in the economy or its sector, used for risk assessment in strategic planning.

Beta

The measure of market risk in portfolio theory. The degree to which a stock’s return moves with the market’s return.

Cost of Capital

The vital rate of earnings a company must generate from its investment plans to preserve its standing in the market and appeal for investments.

Treasury Bills

Short-term government securities with maturities ranging from a few days to 52 weeks, sold at a discount from their face value.