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wlad13 [49]
3 years ago
15

Company A pays its managers a fixed salary. Company B ties compensation to the performance of the stock. Which company’s compens

ation would most help to mitigate conflicts of interest between managers and shareholders?
Business
1 answer:
11111nata11111 [884]3 years ago
5 0

Answer:

Company B

Explanation:

The reason is that the interest of shareholders is to maximize its investment worth and the manager desires to have better salary which is cost to the shareholders. This means that the shareholder's interest are in conflict with that of management which is also known as agency problems. The alignment of interests of both shareholders and the manager is when the payments made to managers in compensation for their salaries are in shares not in cash form. The manager would now work hard to generate more profits than before, this will increase the value of shares in stock exchange which every shareholder desires. So Company B has mitigated conflicts of interest between managers and shareholders by offering managers shares in compensation for their services offered.

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In a new margin account, a customer buys 1,000 shares of ABC stock at $40 per share. The stock rises to $50 during the next week
Helen [10]

Answer:

C) $5,000

Explanation:

Since the price of the stocks first rose to $50, the account's equity was $50,000.

The SMA balance was = ($50,000 x 1/2) - $20,000 = $,5000

The SMA balance acts like a stabilizer and cannot be taken away even if the price of the stocks fall slightly. The price of stocks must fall 25% in order for the SMA to be withdrawn.

The investor's equity decreased = equity - margin requirement = $39,000 - $20,000 = $19,000, but the amount that the investor can borrow (SMA balance) will remain the same at $5,000.

4 0
3 years ago
Modified multiple choice in a business letter, the inside address usually contains the addressee’s ____.
Fofino [41]
Location or which street they are on so if the people u are sending this to need to send something back then u should out your address.
5 0
3 years ago
Presented below are long-term liability items for Pharoah Company at December 31, 2020. Bonds payable, due 2022 $625,000 Lease l
lesya [120]

Answer:

See explanation

Explanation:

Consider liabilities due within period of more than 12 months for the long-term liabilities section of the balance sheet.

4 0
2 years ago
Suppose the revenue from producing​ (and selling) x units of a product is given by Upper R (x )equals 10 x minus . 04 x squared
Volgvan

Answer:

marginal revenue is -6

and production levels 200, 50  

Explanation:

given data

R(x) = 10 x - 0.04 x²  

solution

we have given

R(x) = 10 x - 0.04 x²  

so here R'(x)  is

R'(x) = 10(1) - 0.4 (2x)  

R'(x) = 10 - 0.8 x ....................1

so here at x is 20 marginal revenue will be

R'(20) = 10 - 0.8(20)

R'(20) =  10 - 16

R'(20) = - 6

and

when revenue  is ​$400

R(x) = 400

400 = 10 x - 0.04 x²  

x= 200, 50

7 0
3 years ago
Remo Company and Angelo Inc. are separate companies that operate in the same industry. Following are variable costing income sta
lesya [120]

Answer:

<u>Break-even Sales:</u>

      Remo Company                $128,346.17

      Angelo Inc.                        $201,649.86.

Explanation:

Break-even Sales is the dollar amount of revenue at which there will be neither Profit nor Loss. In other words, it a Point at which Contribution Margin is equal to Fixed Costs. The Formula to Calculate Break-even Sales is:

                         Fixed Cost / Contribution Margin Ratio

where

Contribution Margin Ratio is Sales less Variable Expenses, and expressed as a percentage of Sales.

Remo Company

Contribution Margin Ratio = 75,000 / 275,000 = 27.27%

Break-even Sales = 35,000 / .2727 = $128,346.17

Angelo Inc.

Contribution Margin Ratio = 150,000 / 275,000 = 54.55%

Break-even Sales = 110,000 / .5455 = $201,649.86.

3 0
3 years ago
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