What Action Would the Management Take If It Wants to Gain

question 43

Multiple Choice

What action would the management take if it wants to gain more ownership control of the firm?

• A)Issue more growth stocks
• B)Issue more common stock to the public
• C)Repay portions of its loans
• D)Repurchase shares of common stock
• E)Pay cumulative dividends to preferred stocks

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Definitions:

Firm A

A placeholder name often used to refer to a specific company in examples or case studies.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows.

Company Stock

Shares of ownership in a corporation, representing a claim on the company's earnings and assets.

Incremental Value

The additional value generated by taking a specific action, such as implementing a project, over the base case without taking the action.