AFP
CTP · Question #215
(Topic 3) XYZ Inc. has limited cash flow, total liabilities to total assets greater than 52%, and a high WACC. To help meet the goal of lowering their WACC, the company plans to issue several…
The correct answer is B. violate shareholder pre-emptive rights. See the full explanation below for the reasoning.
Question
- (Topic 3)
XYZ Inc. has limited cash flow, total liabilities to total assets greater than 52%, and a high WACC. To help meet the goal of lowering their WACC, the company plans to issue several million dollars of private equity to the chairman of the board. If the company proceeds with this plan, the company may:
Options
- Anot comply with SOX requirements.
- Bviolate shareholder pre-emptive rights.
- Crequire approval from PCAOB.
- Dneed to report the large currency transaction.
How the community answered
(30 responses)- A7% (2)
- B80% (24)
- C10% (3)
- D3% (1)
Community Discussion
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