April 18, 2014

Homework Help: MANAGERIAL FINANCE. Please help

Posted by Natacha on Friday, October 19, 2007 at 2:46pm.

Hi, I have some questions about managerial finance. I do not really understand them so can u plz help me out!!

Here are the questions:

1. High earnings per share (EPS) do not necessarily translate into a high fundamental stock price. TRUE or FALSE and WHY?

2. Higher risk tends to result in a higher share price since the stockholder must be compensated for the greater risk. TRUE of FALSE and WHY?

3. Due to agency problems it is often best for shareholders to run their own firms. TRUE of FALSE and WHY?

4. Marginal analysis states that financial decisions should be made and actions taken only when added benefits exceed added costs. TRUE or FALSE and WHY?

5. The higher the free cash flows (FCF) that a given firm generates the higher will be its fundamental value. TRUE or FALSE and WHY?

6. When considering each financial decision alternative or possible action in terms of its impact on the share price of the firmís stock, financial managers should accept only those actions that are expected to increase the firmís profitability.

Thank you for your help.

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