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3 years ago

Which of the following are mechanisms that have evolved to mitigate potential agency problems?

Business

1 answer:

Sidana [21]3 years ago

5 0

Answer:

I) Using the firm's stock options for compensation

III) Boards of directors forcing out underperforming management

IV) Security analysts monitoring the firm closely

V) Takeover threats

Explanation:

Agency problem can be regarded as

conflict of interest which are inherent that can exist between management of a company and its stockholders. It exist when there is expectation that one party act in the best interest of other.

It should be noted that Mechanism that are used in mitigation of potential agency problems are;

I) Using the firm's stock options for compensation

III) Boards of directors forcing out underperforming management

IV) Security analysts monitoring the firm closely

V) Takeover threats

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Closing the Accounts of a Merchandiser From the following list, identify the accounts that should be closed to Income Summary at

mixer [17]

Answer:

Advertising Expense , Cost of Merchandise Sold , Merchandise Inventory, Sales,Supplies Expense are closed to income summary account. Revenues and expenses are closed to Income Summary.

Explanation:

Closing Entries

a. Accounts Payable: No it is not closed to income summary account.

b. Advertising Expense: Yes it is closed to income summary account.

c. Cost of Merchandise Sold: Yes it is closed to income summary account.

d. Dividends : No these are closed To Retained Earnings Accounts.

e. Merchandise Inventory : Yes it is closed to income summary account

f. Sales Yes it is closed to income summary account

g. Supplies: No prepaid supplies are an asset account and it is included balance sheet.

h. Supplies Expense: Yes it is closed to income summary account

i. Wages Payable: Not closed in the income summary account.

These are liabilities and included in the balance sheet.

8 0

3 years ago

Consider a country that is operating under a system of flexible exchange rates. If the central bank in this country imposes an e

UNO [17]

Answer:

i a depreciation of its currency;

Explanation:

A flexible exchange rate is when exchange rate is determined by the forces of demand and supply.

an expansionary monetary policy is a policy where the monetary authorities increase the money supply in the economy.

If exchange rate is flexible and an expansionary monetary policy is carried out, the supply of money would exceed its demand. as a result, the value of money would fall. this is known as depreciation

3 0

2 years ago

Common Stock is 2.5 million shares with a current price of $42 per share; the beta of the stock is 1.34; the standard deviation

Kamila [148]

Answer:

the firm's cost of equity is 17.808%

Explanation:

A firm's cost of equity is the return expected by holders of Common Stock.

The Data available allows us to use the Capital Asset Pricing Model (CAPM) to determine the cost of Equity.

Cost of Equity = Risk Free Rate + Company`s Beta × Expected Return on Market Portfolio

= 2.8%+1.34×11.2%

= 17.808%

3 0

3 years ago

Read 2 more answers

Using the Base Case, calculate total depreciation expense for the year 2023E. Assume that depreciation expense on assets pre-202

balu736 [363]

Answer:

b) $33,000

Explanation:

Capital Expenditure = $20,000

Salvage Value in % = 10%

Useful Life = 4 Years

Salvage Value = Salvage Value% * Capital Expenditure

Salvage Value = 10% * 20,000

Salvage Value = $2,000

Annual Depreciation = (Capital Expenditures - Salvage Value) / Useful Life

Annual Depreciation = ($20,000 - $2,000) / 4

Annual Depreciation = $18,000 / 4

Annual Depreciation = $4,500

Depreciation of 2023E = Depreciation Pre 2020E + Depreciation on capital expenditures in 2020E + Depreciation on capital expenditures in 2021E + Additional Depreciation on capital expenditures in 2022E + Additional Depreciation on capital expenditures in 2023E

Depreciation of 2023E = $15,000 + $4,500 + $4,500 + $4,500 + $4,500

Depreciation of 2023E = $33,000

7 0

2 years ago

This Government Representative is appointed by the Contracting Officer to serve as a technical liaison between the Government an

Alex Ar [27]

Answer:

Contracting Officer Representative

Explanation:

An agent of a contracting officer is a person appointed in compliance with the subdivision of DFARS .and approved by the contracting agency in law to automate repetitive technological or essential functions.
A security officer is a man who shares information to interact and coordinate their events between two organizations.

by these process COR work.

3 0

3 years ago