Under TARP Provisions

question 55

Multiple Choice

Under TARP provisions:

• A) shareholder's approval on compensation packages recommended by the company's compensation committee is binding.
• B) if the board disregards the shareholders vote on a recommended compensation package the board is automatically in breach of their fiduciary duties to the company and its owner.
• C) the shareholders have no right to vote on compensation so their approval or disapproval of the compensations committee's recommendation is not considered.
• D) shareholder's approval on compensation packages recommended by the company's compensation committee is merely advisory and the board of directors has final say on compensation matters

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.

Coupon Rate

The yearly percentage of the bond's face value that is paid out as interest by a bond.

Current Yield

The annual income (interest or dividends) divided by the current price of the security.

Times-Interest-Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations based on its current earnings before interest and taxes.