Managerial Goals May Differ from Those of the Shareholders

question 13

Multiple Choice

Managerial goals may differ from those of the shareholders. It is noted that managers may:

• A) have a preference for expense consumption.
• B) be motivated by controlling sufficient resources to stay in business.
• C) avoid the control of the capital market and rely on internally generated funds.
• D) be wanted to depend on external parties.

---

Definitions:

Profit Margin

A fiscal indicator calculating the proportion of income left once total costs are subtracted from revenues.

Equity Multiplier

A financial ratio indicating the proportion of a company's assets that are financed by stockholder's equity.

Long-Term Debt Ratio

A financial ratio that shows the proportion of a company's long-term debt relative to its total capital.

Debt Holders

Individuals or entities that have invested by lending money to another party, expecting repayment plus interest.