In regard to the agency problem, ________ are the principal owners of a corporation.
A) shareholders
B) managers
C) employees
D) suppliers
Serious ethical violations by corporations such as Enron led to the passage of
A) the Dodd-Frank Act.
B) the Insider Trading Act of 1988.
C) the Sarbanes-Oxley Act.
D) All of the above.
The goal of the firm should be the maximization of profit.
Answer: FALSE
One of the problems associated with profit maximization is that it ignores the timing of a project's return.
Answer: TRUE
The goal of profit maximization is equivalent to the goal of maximization of share value.
Answer: FALSE
The goal of profit maximization ignores the timing of profit.
Answer: TRUE
