What Type of Risk Is Intentional Failure by Management to Accurately

question 43

Multiple Choice

What type of risk is intentional failure by management to accurately disclose violations of debt covenants?

• A)Inherent risk.
• B)Fraud risk.
• C)Control risk.
• D)Detection risk.

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionally weighted.

Perpetuity

An annuity in which the cash flows continue forever.

Preferred Stock

A class of share capital that provides shareholders with a fixed dividend payment prior to any dividends being paid to common stockholders and typically does not confer voting rights.

Cost Computation

The process of calculating the total cost involved in manufacturing a product or providing a service.