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7. Which account represents the cumulative earnings of the firm since its formation, minus dividends paid?
a. Paid-in capital
b. Common stock
c. Retained earnings
d. Accumulated depreciation

6. The best indication of the operational efficiency of management is
a. net income.
b. earnings per share.
c. earnings before interest and taxes (EBIT).
d. gross profit.

5. The residual income of the firm belongs to
a. creditors.
b. preferred stockholders.
c. common stockholders.
d. bondholders.

4. Professor Merton Miller received the Nobel prize in economics for his work on
a. dividend policy.
b. investment theory.
c. working capital management.
d. capital structure theory

3. The major difficulty in most insider-trading cases has been
a. that lenient judges have simply released the guilty individuals.
b. that insider trading, even though illegal, actually serves a...

2. Insider trading occurs when
a. someone has information not available to the public which they use to profit from trading in stocks.
b. corporate officers buy stock in their company. ...

1. As mergers, acquisitions, and restructuring have increased in importance, agency theory has become more important in assessing whether
a. a stock repurchase should be undertaken. ...