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Andru [333]
3 years ago
10

The board of directors of UT Wireless, Inc. is considering two compensation plans for the CEO of the company. The first would pa

y the CEO a salary of $300,000 for the upcoming year. The second would pay the CEO a salary of $150,000 and provide the CEO with a stock option to buy 100,000 shares of stock for $11 per share. The current price per share of UT Wireless, Inc. stock is $9 per share. The stock option expires at the end of the year. Why might shareholders prefer the second payment plan? As part of your answer, calculate the break-even point for the CEO to obtain the same compensation under option two as he or she would under option one.
Business
1 answer:
Anna71 [15]3 years ago
8 0

Answer:

solving for the dollar

:amount:

$150,000 = 100,000 shares * ($x-$11)X = $12.50 meaning, the market price per share must be $12.50 in order to earn $150,000 which is the amount needed to break even with option #1.Therefore, stockholders would probably prefer Action#2 over Option #1 because theCEO has an incentive to operate the company in a manner which would successfully raise the market price per share from $9.00 to $12.50 in order to earn $300,000. Under Option #1, the CEO earns $300,000 regardless if the market price per share goes up or down.

2.Are ethics critical to the CEO's goal of maximizing shareholder's wealth? Is establishing corporate ethics policies and requiring employee compliance enough to ensure ethical behavior by employees?

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A. trade-off<br>B. investment<br>C. frontier<br>D. growth ​
disa [49]

Answer:

The answer is "Option C"

Explanation:

The curve on the graph is also known as the arc, which is used in the connected mixture of perceptual lines to three additional lines in standard dual points. The Frontier production options is a nice graph of all the various output mixture of different products which can be produced utilizing existing techniques and knowledge.

3 0
2 years ago
Azule Co. manufactures in two sequential processes, cutting and binding. The two departments report the information below for a
Angelina_Jolie [31]

Answer and Explanation:

The computation of the ending balance in the work in process inventory for each department is shown below:

For Cutting department

= Direct material + conversion + cost added for direct material + cost added for conversion - transferred in from cutting department

= $1,095 + $3,650 + $13,740 + $18,300 - $17,395

= $19,390

And, for binding department

= Transferred in from cutting department Direct material + conversion + cost added for direct material + cost added for conversion - transferred to finished goods

= $1,200 + $2,862 + $3,800 + $9,332 + $19,475 - $31,000

= $5,669

8 0
2 years ago
A firms have no incentive to enter or exit the industry. Select one: a. market price is equal to minimum long.run average cost.
Artyom0805 [142]

Answer: The correct answer is "d. all of the above"

Explanation: In a perfectly-competitive industry a firm have no incentive to enter or exit the industry when:

- market price is equal to minimum long-run average cost.

- each firm earns a normal return.

This happens because in perfect competition companies reach a long-term equilibrium where extraordinary benefits are eliminated.

6 0
3 years ago
Stag Corp. will pay dividends of $4.75, $5.25, $5.75, and $7 for the next four years. Thereafter, the company expects its growth
Natalka [10]

Answer:

$69.41

Explanation:

Given that

D1 = 4.75

D2 = 5.25

D3 = 5.75

D4 = 7

g = 7% or 0.07

R = 15% or 0.15

Therefore,

D5 = D4 (1 + g)

= 7 × 1.07

= 7.49

Also,

P4 = D5/g × R

= 7.49/0.15 × 0.07

= 93,625

Thus,

P0 = 4.75/1.15 + 5.25/(1.15)^2 + 5.75/(1.15)^3 + 7/(1.15)^4 + 93.625/(1.15)^4

= $ 69.41357

Approximately

= $ 69.41

4 0
3 years ago
An investor owns 60 shares of common stock of a company issuing new shares in a rights offering. The stock trades at $12 per sha
Mkey [24]

Answer:

7 shares and $70

Explanation:

The computation is shown below:

The additional shares is

= 60 shares ÷ 9

= 7 shares

And, the amount  of money that have to be paid is

= Additional shares × purchase price

= 7 × $10

= $70

Therefore the same would be considered relevant

4 0
2 years ago
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