Which of the Following Is NOT a Motivation to Manage

question 49

Multiple Choice

Which of the following is NOT a motivation to manage earnings?

• A)Companies try to meet or beat Wall Street earnings projections in order to grow market capitalization and increase the value of stock options.
• B)The ideal pattern of earnings is volatility each year over a period of time.
• C)To smooth net income over time.
• D)To maximize compensation including bonuses.

---

Definitions:

Fair Value

An estimate of the market value of an asset or liability, reflecting current conditions and market perceptions.

Voting Stock

Shares in a company that grant the holder the right to vote on corporate matters, typically related to the election of the board of directors.

Contingent Payment

A payment that is due only if specific conditions are met, typically used in agreements where future outcomes can influence the amount or timing of the payment.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.