A Disadvantage of Decentralization Is That

question 90

Multiple Choice

A disadvantage of decentralization is that

• A)If lower-level managers do not understand the company's strategies and goals,they may make decisions that are not in the best interest of the organization as a whole.
• B)Two or more operational managers may evaluate and make the same decision,duplicating their efforts.
• C)Managers tend to focus on their own
• D)All of these ans choices are correct.

Analyze the factors influencing the value of options and bonds.

Grasp the valuation of firms’ assets and debts and the impact of risk-free interest rates on these valuations.

Understand the characteristics of different types of bonds and their options, including callable, puttable, and convertible bonds.

Master the basics of option strategies, including protective puts and covered calls.

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Definitions:

Net Worth

The total value of assets owned by an individual or corporation, minus any liabilities, indicating financial health.

Working Capital

Working capital is the difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency of the business.

Debt Covenants

Agreements or conditions included in debt contracts that the borrower must adhere to, designed to protect the lender by restricting the borrower’s activities and enhancing the likelihood of debt repayment.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the securities industry.