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:

Growth Opportunities

Growth opportunities refer to the prospects or avenues through which a business can expand its operations, revenues, or market share, including new product lines, markets, or technologies.

Profit Projections

Forecasts of a company's net income over a specific future period.

Tax-Deductible Expense

An expense that can be subtracted from taxable income, effectively reducing the overall tax liability.

Debt Financing

Raising capital through the borrowing of funds to be repaid with interest over time.