Which of the Statements Below Is TRUE

question 31

Multiple Choice

Which of the statements below is TRUE?

• A)Debt capacity refers to the ability to add equity financing to the current borrowing of the firm and still be able to make interest and principal repayments on time.
• B)The asymmetric information foundation for the Pecking Order Hypothesis (POH)is that managers know less about their companies than the outside world.
• C)There are three implications of the POH.One of these is that profitable companies will borrow less (because they have more internal funds available)and may have lower debt-equity ratios because they have more debt capacity.
• D)There are three implications of the POH.One of these is that more profitable companies will need more external funding and will first seek debt financing in an asymmetric world,avoiding the equity market.

Acknowledge the ethical considerations and pressures faced by managers in modern organizations.

Understand the vital role of human resource management and company culture in long-term organizational success.

Recognize the significance of customer and employee involvement in the quality improvement process.

Identify different approaches to management and quality management practices.

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Definitions:

Agency Relationship

A fiduciary relationship in which one party (the agent) agrees to act on behalf of another party (the principal).

Ratify

To formally approve or confirm, often used in the context of treaties, agreements, or legislation.

Commission

A fee paid to an agent or employee for completing a task or making a sale, which is often a percentage of the sale's total value.

Legal Consequences

are the outcomes that follow from the application of the law, such as penalties for breaking the law or the results of legal judgments.