Which of the Following Is True of the "Comply or Else

question 98

Multiple Choice

Which of the following is true of the "comply or else" approach to corporate governance?

• A)It set stiff financial penalties for companies that refused to abide by the operational standards.
• B)It gave companies the flexibility to comply with the standards or explain why they didn't in their corporate documents.
• C)Its definition of what would be an acceptable explanation for not complying was not clear.
• D)It was not incorporated into the Sarbanes-Oxley Act of 2002-which governs ethical behavior in corporations.

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Definitions:

Less Risky

Less risky describes an investment or action that has a lower likelihood of resulting in loss or lower variability in its returns compared to other options.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the open market.

Undervalued

A situation where a securities price is considered to be below its intrinsic value, making it an appealing investment opportunity.

Net Income

The amount of money a company earns after subtracting all expenses, taxes, and losses, indicating the company's profitability over a time period.