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to whom the firm currently owes money.
that initially started a firm and currently has management control over that
firm.
owning bonds or other long-term debt issued by a corporation.
other than a stockholder or creditor who potentially has a financial interest
in the firm.
4.If a firm is currently profitable, then:
its cash flows are known with certainty.
its reported sales exceed its costs.
the timing of the cash flows on proposed projects is irrelevant.
it will always have sufficient cash to pay its bills in a timely manner.
its current cash inflows must exceed its current cash outflows.
4.(Set 2)Which one of these best fits the description of an agency cost?
increasing the dividend payments per share
the benefits received from reducing production costs per unit
the payment of interest on a firm’s debts
the payment of corporate income taxes
the payment required for an outside audit of the firm