What is the implication of managerial entrenchment: should company favor debt or equity? Why?

Q: What is financial leverage and how does it affect a business's performance?

A: The company borrows money to acquire assets and do operations. The amount of debt a corporation has…

Q: 3. How does operating leverage impact the operating risk and profit levels of a company?

A: Operating leverage measures the percentage increase in operating income which is a result of change…

Q: How could overconfidence affect the financial manager of the firm and the firm’s shareholders?

A: The company have the option to issue its equity shares to the public for raising capital or…

Q: If markets are truly efficient, does it matter whether firms engage in earnings management? On the…

A: If the company concentrated on earnings management then the market is not truly efficient.

Q: Importance of gatekeeper in company and financial?

A: Gatekeeper     The set of institutions, as well as actors, help to provide investors with the time…

Q: up between owners and managers and how

A: Profit maximization and value maximization are two financial management approaches that define the…

Q: What are the possible actions that a firm can take if it experiences a financial failure?

A: Financial failure of the firm could be resulted because of overspending, higher degree of illiquid…

Q: What goals might be persued by managers instead of maximization of shareholders wealth

A: Shareholders are individuals, entities, or institutions that own shares or equity in a company. When…

Q: Why might one expect managers to act in shareholders' interests? Give some reasons.

A: Managers would act in shareholders’ interests as a result of they need a duty to act in their…

Q: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: How does earnings management affect earnings quality?

A: Earnings of a company is referred as net income or bottom line item of a company. It is a very…

Q: How does past knowledge of profit and loss impact your perspective on company management?

A: This Question deals with how does past knowledge of profit and loss impact your perspective on…

Q: What factors contribute to the business risk of a company? What is financial risk? How do the…

A: Financial risk relates to how a company uses its financial leverage and manages its debt load.…

Q: How can the use of debt serve to discipline managers?

A: A debt in a capital structure is a liability for the company on which company is bound to earn as…

Q: why do firms use non financial measures

A:

Q: How can the company's management balance liquidity, solvency, and profitability goals?

A: Balancing liquidity, solvency, and profitability is a core tenet of effective financial management..…

Q: how does the existence market for corporate control affect firm performance?

A: Market for corporate control: When the resources of the company are not utilized to its fullest…

Q: What are the main implications of financial risk associated with the company?

A: There are various types for financial risk which are associated with the company such as: 1) Market…

Q: Why is it important to understand the economic systemunder which a company operates before entering…

A:

Q: If a firm's expenses equal or exceed its revenue, what actions might management take?

A: Expenses are the costs or amounts that are incurred by an entity for meeting up the daily needs of…

Q: What are the conflicts between shareholders and managers

A: Shareholders are real owners of company as they hold proportion of common stock in company but due…

Q: Which one is not part of financial managerial decision in the corporate financial management?…

A: The responsibility of overseeing the financial operations and capital investment choices of their…

Q: What is earnings quality? What are the possible topics or areas that the reported  earnings may not…

A: When you look at a company's earnings, you can see how good they are by ignoring any anomalies,…