What would be a reason a company would want to understate income?A. to help nudge its stock price higherB. to lower its tax billC. to show an increase in overall profitsD. to increase investor confidence
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What would be a reason a company would want to understate income?
A. to help nudge its stock price higher
B. to lower its tax bill
C. to show an increase in overall profits
D. to increase investor confidence
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- What would be a reason a company would want to overstate income? A. to help nudge its stock price higher B. to lower its tax bill C. to show a decrease in overall profits D. none of the aboveWhat would be a reason a company would want to overstate income?A. to help nudge its stock price higherB. to lower its tax billC. to show a decrease in overall profitsD. none of the aboveThe price/earnings ratio is commonly used by investors to OA. evaluate their ability to earn a return on their investment OB. determine the market value of the company OC. determine the market price per share of stock of a company OD. determine if the company has a low amount of debt
- Which of these would best improve a firm's liquidity position? *a. Lower profitabilityb. Higher capital spendingc. Higher need for noncash current assets on the balance sheetd. Declaration of stock dividends1. The more optimistic investors are about a company’s future profits, the ________ the ratio of the company’s market value to book value.greaterlowerno effect onUsing profit as the sole guide for corporate action can lead to short term profits but: Ba.) increased corporate social responsibility optionsb.) long-term loss of customersc.) more complicated measurement challengesd.) increased tax liabilities
- If the stock market is efficient, why do companies manage their earnings? O To avoid violating debt covenants. O To receive bonuses based on reported earnings. O Because companies do not believe the Efficient Market Hypothesis. O All of the above.To what extent do you feel the company’s dividend policies support or hinder their strategies? For example, if the company is attempting to grow, are they retaining and reinvesting their earnings rather than distributing them to investors through dividends? Be sure to substantiate your claims.Can you identify a possible explanation for the company’s declining profits? If so, what is it?
- The quality of earnings concept indicates thata. stockholders want the corporation to earn enough income to be able to pay its debts.b. net income is the best measure of the results of operations.c. continuing operations and one-time transactions are of equal importance.d. income from continuing operations is a more relevant predictor of future performancethan income from one-time transactionsIs this statement true or false? Give a reason for your answer. "An increase in a firm's inclination to pay dividends may be because of a decline in profitable investment opportunities in the future."is(are)the reason(s) for profit maximization not a reasonable goal for firms. a. Profit concept ignores timing of the returns b. Profit concept ignores the cash flow available to stock holders c. Profit is risky and can be some times loss d. All the above