Question

In: Finance

Which of the following is true?


Which of the following is true? 

Book value is a better measurement than market value 

The separation of ownership and management is one distinctive feature of corporations. 

The primary goal of any company should be to maximize current period profits. 

Diversification decreases the variability of both specific and market risk.

Solutions

Expert Solution

(1) The Given Statement is False As Market value is better measurement than Book Value as Market Value tells the Actual Situation While Book Value can be changed

(2) The Given statement is True that the seperation of ownership and management is one distinctive feature of Corporations

(3) The Given Statement is False As the Primary goal of the company is to increase market share not the current Profit .

(4) The Given Statement is False as Diversification can decrease the Variability of Specific risk but not the market risk .  

jeff jeffy answered 2 years ago
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