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Primary responsibility for a financial manager

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Reference no: EM133057434

1) Which of the following is notMaximize the wealth for existing shareholders a primary responsibility for a financial manager?

  • Lower the cost of capital by obtaining a cheaper source of debt
  • Invest corporate funds in bonds earning a YTM of 3.5% while the firm's cost of capital is 7%
  • Develop a policy for optimizing the capital structure 
  • Use capital budgeting analyses and decision rules to approve or reject projects 

2) If everything else holds constant, the value of a call option will increase if the time until expiration increases and the stock price increases. 

True or False? 

  • False
  • True

Reference no: EM133057434

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