In Trying to Assure That Managerial Actions Lead to Shareholder

question 75

Multiple Choice

In trying to assure that managerial actions lead to shareholder value maximization, a risk can come about if the market value of a firm becomes less than its book value. The risk is

• A)it becomes an attractive takeover target.
• B)the firm will be delisted by the stock exchange.
• C)the Securities and Exchange Commission will not allow it to declare dividends until the market value once again exceeds the book value.
• D)the firm will be unable to service its debt.

Understand the principles of setting effective performance standards.

Identify the roles of reliability and validity in performance evaluations.

Differentiate between administrative and developmental purposes of performance evaluations.

Recognize the impact of organizational politics and bias on performance evaluations.

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Definitions:

Mailbox Rule

A rule providing that an acceptance of an offer becomes effective on dispatch.

Air-conditioned Bus

A bus equipped with a system to cool and dehumidify the air, providing comfort to passengers.

Tour Group

A group of individuals organized for the purpose of traveling together, usually with a guide or planned itinerary.

Transact Business Electronically

The conduct of business activities through electronic means, such as the Internet or other digital platforms, rather than through physical exchanges or face-to-face.