Which of the following are accurate statements concerning the role that restrictive covenants play in reducing moral hazard in financial markets?
A) Covenants reduce moral hazard by restricting borrowers' undesirable behavior.
B) Covenants require that borrowers keep collateral in good condition.
C) Covenants require periodic accounting statements and income reports.
D) All of the above.
E) Only A and B of the above.
D
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To fully understand why, how, and where they intend to do business, now and over time, managers must have:
A. a clear understanding of the company's mission. B. a vision for how they intend to achieve the company's mission. C. an understanding of how the company plans to compete with other companies. D. a clear understanding of the company's mission, a vision on how to achieve the mission and how the company plans to compete.
Cash dividends paid to the stockholders will:
A. increase assets and decrease liabilities B. decrease assets and increase liabilities C. have an effect on stockholders' equity D. decrease assets and decrease liabilities