1. Which of the following mechanisms is used to motivate managers to act in the interest of shareholders?
Pressure from the board of directors
Two statements are correct.
Threat of a takeover.
Bond covenants.
All of the statements above are correct.
2. What is the difference in the future value between a 5-year ordinary annuity and a 5-year annuity due? Both have annual payments of $200, evaluated at a 15% annual interest rate?
$262.82
$296.64
$202.27
$198.14
$245.16