In Trying to Assure That Managerial Actions Lead to Shareholder

question 73

Multiple Choice

In trying to assure that managerial actions lead to shareholder value maximization,a risk can come about if the market value of a firm becomes less than its book value.The risk is

• A) it becomes an attractive takeover target.
• B) the firm will be delisted by the stock exchange.
• C) the Securities and Exchange Commission will not allow it to declare dividends until the market value exceeds the book value.
• D) the firm will be unable to service its debt.