Why Do Corporations Want to Keep the Price of Their

question 151

Multiple Choice

Why do corporations want to keep the price of their stock high?

• A)A higher stock price increases the funds the firm can raise when it sells a given amount of stock.
• B)Corporations can pay their managers lower salaries and avoid principal-agent problems when stock prices are higher.
• C)Higher stock prices are correlated with lower expected profitability.
• D)All of the above provide incentive for corporations to keep the price of their stock high.

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Definitions:

Type I Alcoholism

A subtype of alcoholism, often developing later in life, characterized by less genetic predisposition and often triggered by environmental or emotional factors.

Low Nicotine

Refers to tobacco products that have been engineered or processed to contain minimal amounts of nicotine, aimed at reducing dependency and health risks associated with nicotine consumption.

Nicotine

A stimulant and addictive substance found in tobacco, affecting the nervous system.

Withdrawal Symptoms

Physical or psychological symptoms that follow the abrupt discontinuation of a drug or substance to which one is addicted.