The Institution's Governing Board Decided to Create an Endowment from Contributed

question 34

Multiple Choice

The institution's governing board decided to create an endowment from contributed funds, this is called an ________ and the funds are unrestricted.

• A) Endowment.
• B) Term endowment.
• C) Quasi-endowment.
• D) None of the above.

Understand the impact of different financial elements such as financial distress, agency costs, and bankruptcy costs on a firm's target capital structure.

Grasp the basic principles of the Modigliani-Miller (MM) theorem, including its propositions with and without taxes.

Differentiate between business risk and financial risk and their determinants.

Comprehend the concept of financial leverage and its impact on a firm’s earnings per share (EPS) and earnings before interest and taxes (EBIT).

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Definitions:

Delegation

The process of assigning responsibility and authority to others to carry out specific tasks or functions.

Hierarchy

An arrangement or institution where individuals or entities are classified above or below each other based on their status or power.

Organizational Behavior

The study of individual and group dynamics within an organizational context, focusing on improving productivity and promoting healthy work environments.

Real-life Settings

Contexts or environments that occur naturally in everyday life, as opposed to controlled or artificial situations.