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3 years ago

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers?

1 answer:

8 0

What could reduce potential conflicts of interest is the use of covenants in bond agreements that limit the firm's use of additional debt and constrain managers actions

Let understand that Shareholders are basically the “owners” of the company and they are entitled to dividend payments and stock price appreciation because they bought shares.

Let understand that Managers are the people or officers who manage the company (& shares) on a daily basis.

Now, there can be conflicts of interest between stockholders and managers because of disagreement on what should be and not.

The major actions that can help to reduce this conflict are covenants in bond agreements. By reason of this, the manager of limited on what to do with the funds of the shareholders and can be penalized if found defaulted by law.

Learn more about covenants in bond agreements

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If other things are held constant, an increase in the United States imports will

VMariaS [17]

Other things remaining constant, increased US imports will D. Tend to cause the dollar to depreciate because the world supply of dollars will rise.

<h3>What is the implication of increased United States imports with other factors constant?</h3>

With increased imports by the United States, and if all other factors are held constant, the supply of dollars will increase.

When the supply of dollars increases without a corresponding increase in demand, the dollar will depreciate or lose its value relatively.

Thus, if other things remain constant, increased US imports will D. Tend to cause the dollar to depreciate because the world supply of dollars will rise.

Learn more about exchange rates at brainly.com/question/2202418

7 0

2 years ago

Bramble Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $59

shusha [124]

Answer and Explanation

Given:

Accounts receivable balance = $598,000

Percentage of receivables that are uncollectible = 5% or 0.05

Uncollectible receivables = 0.05 × 598,000 = $29,900

Adjusting journal entry to record bad debt expense is:

Particulars Debit Credit

Bad debts expense XXXXX

Allowance for doubtful debts XXXXX

(Being bad debts incurred)

Noe, Allowance for doubtful debts has a credit balance of $4,800.

Bad debt incurred = 29,900 - 4,800 = $25,100

So adjusting entry :

Particulars Debit Credit

Bad debts expense $25,100

Allowance for doubtful debts $25,100

(Being bad debts incurred)

7 0

4 years ago

Bonds are a form of ________, with bond prices and interest rates that move in _________ . a. equity; the same direction b. equi

forsale [732]

Answer:

(d) debt; opposite direction

Explanation:

Bonds or debentures represent fixed interest bearing instruments issued by corporates to raise long term funds i.e usually greater than 1 year repayable after a fixed duration.

Bonds could be of various forms such as zero coupon bonds, deep discount bonds, face value bonds etc

The common aspect of all being bonds represent debt which a corporation owes which must be repaid after a fixed duration. Also bonds demand periodic interest payments i.e fixed obligation which cannot be refused by the issuer company.

There is an inverse relationship between bond prices and market interest rates.

Reason : This is because if a higher interest rate prevails in the market than the coupon rate offered by the issuer, the issuer will have to reduce the price of it's bonds so as to make them attractive else investors would rather invest in other bonds in the market offering a higher rate of return.

7 0

3 years ago

If the quantity supplied responds only slightly to changes in price, thenA. supply is said to be elastic.B. even a large decreas

Murrr4er [49]

Answer:

D. supply is said to be inelastic.

Explanation:

When the change in the quantity supplied of any good is less sensitive due to change in the price, then the supply is known as the inelastic and If the quantity supplied responds only slightly to changes in price, then supply is said to be inelastic.

6 0

3 years ago

According to the capital asset pricing model, the expected return on a security is: Group of answer choices positively and linea

Delicious77 [7]

Answer:

e. the expected return on a security is positively and linearly related to the security's beta.

Explanation:

As per CAPM: Expected return (ER) = Rf + \beta (Rm - Rf)

Lets assume risk free return (Rf) as 5%, \beta as 2 and expected market return (Rm) as 10%

then, ER = 5% + 2 (10% - 5%) = 15%

However if lets assume all the other factors remain the same and \beta increases to 3

then, ER = 5% + 3 (10% - 5%) = 20%

Similarly if \beta reduces to 1

then, ER = 5% + 1 (10% - 5%) = 10%

So higher the \beta higher is the risk and hence higher the expected return. Hence expected return on a security is positvely and linearly related to the security's beta

5 0

3 years ago