University:
Eastern Kentucky University
Course:
FIN 301 | Corporate Finance
Academic year:

2021
Views:

498

Pages:

2
Author:

Nesbyenvkk

FIN 301 Homework 6-2 1. Managers of corporations need to act in an ethical manner because a business must be trusted by investors, customer and the public if it is to succeed. 2. Serious ethical violations by corporations such as Enron led to the passage of The Sarbanes−Oxley Act. 3. One of the problems associated with profit maximization is that it ignores the timing of a project's return. True 4. The goal of profit maximization is equivalent to the goal of maximization of share value. False 5. The goal of profit maximization ignores the timing of profit. True 6. The goal of maximize shareholder wealth inevitably conflicts with socially responsible behavior on the part of corporation. False 7. The Sarbanes-Oxley Act of 2002 (SOX) was passed to directly confront concerns about both agency and ethical issues. Select all of the following statements that correctly describe this act. A. While the goal of SOX is to provide greater protection against accounting fraud and financial misconduct, the demanding reporting requirements of SOX are quite costly and may inhibit firms from listing on U.S. stock markets. B. The purpose of SOX is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the security laws. C. SOX holds corporate advisors who have access to or influence on company decisions, legally accountable for any instances of misconduct.