Which of the Following Statements Is FALSE

question 26

Multiple Choice

Which of the following statements is FALSE?

• A)New SEC rules require firms to report option grants within two days of the grant date,which may help prevent further abuses.
• B)Studies have found evidence that the practice of timing the release of information to maximize the value of CEO stock options is widespread.
• C)Managers have an incentive to manipulate the release of financial forecasts so that good news comes out before options are granted and bad news is delayed until after the options are granted.
• D)The factor contributing most to the climb in CEO total compensation for the 1990s was the sharp increase in the value of stock and options granted each year.

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Definitions:

Operating Activities

Daily business functions and transactions related to a company's core business operations, such as sales, provision of services, and purchasing of raw materials.

Expenses

Costs incurred in the process of earning revenue, including operational costs, utilities, salaries, and rent.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, included in a company's cash flow statement.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.