posted by .

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 firm’s stock, financial managers should accept only those actions that are expected to increase the firm’s profitability.

Thank you for your help.

  • MANAGERIAL FINANCE. Please help -

    I can get you started --

    1. Investors in stocks are fickle. Often they'll bid up the price of a stock if EPS rise. But -- it doesn't always happen. I've seen stocks that continually increase their EPS for three or four years, but the price of the stock doesn't change much. Part of a stock price is what investors think the stock is going to do in the future. If shareholders bid up the price of a stock so that future growth is considered in this price, the stock price may not move much.

    Higher risk has little to do with stock prices. So-called penny stocks -- and those that sell for a dollar or two a share are usually the riskiest stocks, while Google is trading around $650 a share.

    Now it's your turn. What do you think the other answers are?

  • MANAGERIAL FINANCE. Please help -

    these were my midterm managerial finance questions!! where did u get these from ??

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    I have two finance questions that I need help on - willing to pay. Please respond back No need to pay. Just post the questions, and we will do our best to help. Thanks for asking.
  2. Managerial finance

    Can u please help me on this: High cash flow is generally associated with a higher share price whereas higher risk tends to result in a lower share price. is it true of false?
  3. MANAGERIAL FINANCE plz help!!

    Hi, i need some help on my managerial finance course. You are 25 and just about to graduate from college. You are considering whether to go to Business School right after college or take the job that you have been offered. Being finance …
  4. Help Needed

    I really need help with my Heredity problems. I have a few questions on them which I do not understand, and I went to some sites as well, but some sites require this type of flash thing which I do not have, and so if there is anyone …
  5. Finance

    Ten years ago, Levin Inc. earned $0.50 per share. Its earnings this year were $2.20. What was the growth rate in Levin's earnings per share (EPS) over the 10-year period?
  6. Finance

    Arena Distributors is a new company and currently pays no dividends. The company has just reported earnings of $1.5 per share and its earnings are expected to grow at a 15 percent annual rate over the next four years. Following this …
  7. Finance

    2) The company wishes to raise $100 million by issuing stock. The current market price is $15 per share, however, if issued the price will drop to $12.50 per share. How many shares will need to be issued if under writing is 5% per …
  8. Fundamentals of Finance

    I've posted 2 different questions on the above mentioned and no one has helped with the questions, or if it was than how to I go about finding them. HELP! I'm so lost here!
  9. Finance

    Suppose the firm (has sales of $586,000, costs of $247,000, depreciation expense of $43,000, interest expense of $32,000, and a tax rate of 35 percent) had 85,000 shares of common stock outstanding. What is the earnings per share, …
  10. accounting

    home / study / math / other math / questions and answers / the following tabulation gives earnings per share ... Question: The following tabulation gives earnings per share ... The following tabulation gives earnings per share figures …

More Similar Questions