Which of the Following Is Not a Consequence of Government

question 65

Multiple Choice

Which of the following is not a consequence of government subsidized flood insurance?

• A)More people will choose to live in areas susceptible to flooding.
• B)Taxpayers will have to help pay for the rebuilding of flooded properties.
• C)It makes actual risks of flooding look artificially low.
• D)More people will choose to live and work on higher ground.

Recognize the importance of leverage and its impact on corporate value.

Understand the principal-agent relationship and agency issues within a corporation.

Apply the corporate valuation model to estimate the value of operations and the price per share of a company.

Understand the effect of dividend policy on the application of the corporate valuation model.

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Definitions:

Bonds Payable

Long-term liabilities representing the amount a corporation or government is obligated to repay bondholders, including principal and interest.

Indirect Method

An accounting procedure used in cash flow statements to adjust net income for changes in non-cash items and cash operating expenses.

Operating Activities

Business activities directly related to the production, sale, and delivery of a company's products or services, reflected in its cash flow.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.