It is generally argued that the takeover constraint : Deters management from engaging in opportunistic behavior. Deters management from considering acquiring other companies. Deters management from declaring dividends. Deters management from increasing a firm’s level of borrowing.

Q: Explain the problems of adverse selection and moral hazard caused by asymmetric information. How can…

A: A financial institution is a corporation or person who acts as another go for different parties in…

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A: Purchasing Power Risk is a risk that could cause a possible loss to an investment you made or income…

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A: Explanation:- The chance or possibility of experiencing damages in relation to the projected returns…

Q: How would you expect this situation to affect the assessment of Eastern’s financial condition and…

A: The objective of the question is to understand how the low barriers to entry and the associated risk…

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Q: 17. Which of the following is not a reason why companies are not always entirely clear on their…

A: Dividend policy is a set of guidelines, decisions and practices that a company establishes to…

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A: Diversified acquisition means those acquisitions in which the company acquires the other company to…

Q: Ethical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock…

A: While taking business decisions, business ethics play an important role. Business ethics means right…

Q: Which of the following is true regarding IPO pricing?     Answers: Underpricing is more popular…

A: Correct answer is (a) Underpricing is more popular which hurts the firm.

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A: Liquidity risk is the possibility that an investor or entity may encounter difficulty in buying or…

Q: What is the possible agency conflict between inside owner/managers and outside shareholders? What…

A: What is the possible agency conflict between inside owner/managers and outside shareholders?…

Q: The "Discipline of the Market" means that in a competitive market customers and investors deal with…

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Q: Firm's that choose to hold more current assets are in general is more ILLIQUID that firms that do…

A: Current assets are resources of value that the company expects to utilize or transform in 1 year to…

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A: The topic involves assessing the validity of arguments against granting increased influence to…

Q: or

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Q: should companies retain these dividends in the firm to protect employment and investments?

A: Since there are 3 separate questions it is possible to solve the first question.

Q: reduce political risk

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Q: rong form efficient eak form efficient and S

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Q: An objection to managing a firm on behalf of stakeholders rather than shareholders is that​ _

A: Stakeholders are different from shareholders. Stakeholders refer to those who are impacted by the…

Q: Firms facing hostile takeovers often take actions to forestall the acquisition. For instance, a…

A: Hostile takeovers refer to those acquisitions and takeovers in which the management of the company…