Why Should Task Forces That Are Formed to Work on Key

question 14

Multiple Choice

Why should task forces that are formed to work on key change initiatives be staffed by stars?

• A) Minimizes the need to outsource tasks
• B) Ensures that key players earn promotions
• C) Establishes an effective and reasonable time schedule
• D) Improves the odds of good recommendations being made

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Definitions:

Capital Structure

The mix of debt and equity financing a company uses to fund its operations and growth.

M&M Proposition II

Modigliani and Miller's Proposition II states that a company's cost of equity increases as it increases its leverage due to the risk premium on equity.

Debt-Equity Ratio

A financial ratio that measures the relative proportion of shareholders' equity and debt used to finance a company's assets.

Financial Risk

The chance of incurring a loss in capital in an investment or business operation.