19. Which of the following statements is FALSE? A) Leverage can reduce the degree of managerial entrenchment because managers are more likely to be fired when a firm faces financial distress. B) When a firm is highly levered, creditors themselves will closely monitor the actions of managers, providing an additional layer of management oversight. C) According to the empire building hypothesis, leverage increases firm value because it commits the firm to making future interest payments, thereby reducing excess cash flows and wasteful investment by managers. D) Managers of large firms tend to earn higher salaries, and they may also have more prestige and garner greater publicity than managers of small firms. As a result, managers may expand (or fail to shut down) unprofitable divisions, pay too much for acquisitions, make unnecessary capital expenditures, or hire unnecessary employees.
Answers: 3
Business, 22.06.2019 11:20
Lusk corporation produces and sells 14,300 units of product x each month. the selling price of product x is $25 per unit, and variable expenses are $19 per unit. a study has been made concerning whether product x should be discontinued. the study shows that $72,000 of the $102,000 in monthly fixed expenses charged to product x would not be avoidable even if the product was discontinued. if product x is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be:
Answers: 1
Business, 22.06.2019 15:00
Portia grant is an employee who is paid monthly. for the month of january of the current year, she earned a total of $8,388. the fica tax for social security is 6.2% of the first $118,500 earned each calendar year and the fica tax rate for medicare is 1.45% of all earnings. the futa tax rate of 0.6% and the suta tax rate of 5.4% are applied to the first $7,000 of an employee's pay. the amount of federal income tax withheld from her earnings was $1,391.77. what is the total amount of taxes withheld from the portia's earnings?
Answers: 2
19. Which of the following statements is FALSE? A) Leverage can reduce the degree of managerial entr...
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