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artcher [175]
3 years ago
5

What are three techniques stockholders can use to motivate managers to maximize their stock’s long-run price? Should managers fo

cus directly on the stock’s actual market price or its intrinsic value, or are both important? Explain.
Business
1 answer:
Romashka [77]3 years ago
6 0

Answer:

Please see below.

Explanation:

a.

• Reasonable compensation package. Every stockholders would usually want a good return on their investments. One of the techniques that can be used by them is to offer good and reasonable compensation packages to the company's highly performing executives and managers. The aim is to spur them to act in the best interest of the stockholders and not themselves. This will also translate to better performance of the company.

• Firing of managers who don't perform well. If a company's stock is not performing well(does not appreciate), such would usually be tied to its board and managers. Stockholders are the owners of a company because their funds are being used to trade hence can threaten to replace or actually replace any manager who is not performing well. By so doing, the managers that are retained will be motivated to perform really well in order to retain their jobs hence translate to better company performance.

• Threat of hostile take over. Stockholders could also threaten a company's board of being taken over by a proven and well accomplished company , if their stock price does not improve overtime. When the managers or board realize that their job is being threatened, they will be motivated to act fast by ensuring that the company's stocks yield adequate return in the long run.

b.

What should be paramount to managers is how to ensure that their company's intrinsic stocks value(an estimate of the true value of a stock, that is premised on well calculated risk) are well maximized. The stockholders should also be carried along while this process is on going. By maximizing their stock's intrinsic value, such would bring about high value to the stocks, while as time goes on, the actual stock price will be much closer to the intrinsic value of the stocks.

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6 0
3 years ago
The adjusting entry to account for use of supplies consists of a: Multiple Choice debit to Supplies Expense and a credit to Supp
barxatty [35]

Answer:

debit to Supplies Expense and a credit to Supplies

Explanation:

The adjusting entry to use the supplies is shown below:

Supplies expense Dr XXXXX

           To Supplies XXXXX

(Being the supplies is adjusted)

For recording the adjusting journal entry, we debited the supplies expense and credited the supplies so that the proper posting could be done

Hence, the first option is correct

3 0
3 years ago
The group of accounting educators who offer their opinions about proposed FASB statements, after research has been done to deter
sasho [114]

Answer:

.D. the AAA.

Explanation:

The American Accounting Association (AAA) is a global accounting education, analysis and practice excellence organization. It is a voluntary group of people with a passion in research and education in accounting.

4 0
3 years ago
Data related to the inventories of Costco Medical Supply are presented below: Surgical Equipment Surgical Supplies Rehab Equipme
Elan Coil [88]

Answer:

$163

Explanation:

The accounting standard for Inventory under IFRS IAS 2 requires that inventory be recognized at cost which includes all the cost incurred to bring the item of inventory to a state or place where the item of inventory becomes available for sale.

These costs includes cost of purchase, freight, Insurance cost during transit etc.  

Subsequently, inventory is to be carried at the lower of cost or net realizable value.  The net realizable value is the difference between the cost and cost to sell.

Given;

   Surgical Equipment    Surgical Supplies  Rehab Equipment Rehab Supplies Selling price $ 265                $ 132                        $ 352                  $ 159

Cost               $ 163                 $ 100                       $ 252                  $ 159

Costs to sell   $ 26                  $ 11                          $ 32                    $ 7

Net realizable  $ 239               $ 121                       $ 322                 $ 152

Applying the lower of cost or net realizable value rule, the inventory of surgical equipment would be valued at

= $163

5 0
3 years ago
4. Woodson Corporation provided the following information regarding its only product: Sale price per unit $65.00 Direct material
Montano1993 [528]

Answer:

B. Decrease by $2,800

Explanation:

Direct labor incurred $185,000  for 10,000 units, then it is $18.5 per unit

Direct materials used $160,000 for 10,000 units, then it is $16 per unit

Variable manufacturing overhead $120,000 for 10,000 units, then it is $12 per unit

Variable selling and administrative expenses $70,000 for 10,000 units, then it is $7 per unit

Additional revenue from accepting a special order is $72,000 = 1,200 units x sale price of $60

Additional fixed manufacturing overhead costs is $5,000

Additional variable cost $64,200 = 1,200 units x ($18.5+$16+$7+$12)

So net operating loss from special order is $2,800 = additional revenue of $72,000 – additional fixed cost of $5,000 - Additional variable cost of $64,000

6 0
3 years ago
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