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.

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Definitions:

Environmental Performance Index

A quantitative measure that evaluates and ranks the environmental performance of a country's policies across a range of issues.

Individual Transferable Quotas

Regulatory tools that limit the volume of resources, such as fish, that an individual or company is authorized to catch or harvest.

Enforceable

Capable of being imposed or upheld by law or rule, ensuring compliance or obedience.