Neehara Is an Executive at a Consulting Firm

question 89

Multiple Choice

Neehara is an executive at a consulting firm. While in office, she likes browsing the Web and using social networking sites. Which of the following statements is most likely to be true in this scenario?

• A) She can continue browsing the sites as she has electronic privacy by default.
• B) She will not be in any trouble as her employer cannot monitor her Internet usage.
• C) She can continue browsing the sites as they are not illegal.
• D) She should continue browsing the sites if her co-workers are also doing the same.
• E) She should find out the Internet usage policy of her employer and follow it.

---

Definitions:

Break-even EBIT

The level of earnings before interest and taxes (EBIT) at which a company neither makes a profit nor incurs a loss.

Target Capital Structure

Refers to the mix of debt, preferred stock, and common equity that a company aims to hold to fund its operations and maximize its value.

WACC

Weighted Average Cost of Capital - a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.