Answer: TRUE
Explanation: Moral hazard refers to the situation when an individual starts taking avoidable risk unnecessarily when he or she is aware of the fact that any potential loss will be bore by the third party and not him.
Thus, if the manager is taking more and more risk knowing that they are insured is a clear example of moral hazard. Hence, the given statement is true.
Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of a company.
A corporation, abbreviated as co., is a legal entity representing an association of persons, whether entity, legal or a mixture of the two, with a particular objective. The members of the company share a common goal and together achieve the stated specific goals.
A society may be established as an agency that gives society limited liability when its members perform or fail to perform their obligations under a publicly disclosed constitution or policy. to be announced. When a business closes, it may need to be liquidated to avoid other legal obligations.
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Answer:
b. expectations that stock prices would fall further could shift the AD curve further to the left.
Explanation:
The AS/ AD model stated the aggregate supply and aggregate demand model which stated level of prices and its output by maintaining the relation between the supply and demand
As in the given situation, it is mentioned that the aggregate supply of short run decline and that brings deflation and it moves the economy back to the output i.e potential. It impacts the expectation of stock prices would result in declines and further it shifted the AD curve to the left side
Hence, the correct option is B.
Answer:
Provide protective mechanisms.
Explanation:
The five principles used to create a more ethical culture at work are:
- Be a role model and be visible.
- Communicate ethical expectations.
- Offer ethics training.
- Visibly reward ethical acts and punish unethical ones.
- Provide protective mechanisms: he company needs to provide some type of formal protective mechanism for employees who want to report unethical behavior and may fear getting in trouble for doing so. This way the employee can remain anonymous and will feel conformable with disclosing the information.
Answer:
4.51%
Explanation:
First, find the yield to maturity(YTM) of the bond; this would be the pretax cost of debt.
Using a financial calculator, input the following;
Face value of the bond ; FV = 1000
Semiannual coupon payment; PMT = (8%/2)*1000 = 40
Present value of bond; PV = -1050
Time to maturity; N = 20*2 = 40 semiannual payments
then compute semi-annual interest rate ; CPT I/Y = 3.756%
The pretax cost of debt = 3.756% *2 = 7.51%
After tax-cost of debt is used for WACC calculation and is therefore as follows;
7.51%(1-0.40) = 4.51%
