Final Exam Practice
1. Agency costs can be thought of as the loss in the value of a firm resulting from the following actions by managers: I) reduced effort, II) perks or private benefits, III) empire building, IV) entrenching investments, V) avoiding risks.
a. I, II, III, IV and V only
2. One key assumption of the Miller and Modigliani (MM) dividend irrelevance is that:
b. Capital markets are efficient
3. Analysis of past monthly movements in Wal-Mart’s stock price has
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