What is the yield to maturity on Fox Inc.'s bonds if its after-tax cost of debt is 9% and its tax rate is 34%?
Answer(s): C
The 9% represents the average-tax cost, or 66% (100% - 34%) of the yield. Thus, divide 9% by 66% to find the before-tax interest9% ÷ 66% = 13.64%
An organization's executive committee, meeting to solve an important problem, spent 30 minutes analyzing data and debating the cause of the problem. Finally, they agreed and could move onto the next step. Possible steps in the creative problem-solving process are listed below. Which step should the committee perform next?
Answer(s): B
Robert Kreisler [Management, 9th ed., Houghton-Mifflin (2004), page 268] states that "managerial problem solving consists of a four-step sequence: (1) identifying the problem, (2) generating alternative solutions, (3) selecting a solution, and (4) implementing and evaluating the solution." In the first step, management determines what the actual situation is, what the desired situation is, and the reason for the difference.
the rational decision-making process is most often typified by
Rarely can decision makers know all possible courses of action, the variables that will affect them, and their precise outcomes. Decision makers face limitations of time, money, technical methods, and creativity. Accordingly, they are restricted to a bounded rationality. Because rationality is inherently limited, decisions invariably 1entail some risk.
A company has recently introduced total quality management (TQM). The company's top management wants to determine a new and innovative approach to foster total participation throughout the company. Management should
Group decisions tend to be more creative than individual decisions. One creative approach is brain- storming, which breaks down broadly based problems into their essentials. It is an unstructured approach that relies on the spontaneous contribution of ideas from all members of a group.
which of the following is not an assumption that is made when assuming rationality on the part of the company?
Answer(s): D
According to Robbins, Organizational Behavior (6th ed. Prentice-Hall, 1993), rationally has the same assumptions as the optimizing (outcome maximizing) model for decision making. Rational decision making is fully objective and logical. The model assumes that a single, well-defined goal is to be maximized; that all relevant criteria and feasible options are known; that the criteria and options can be assigned numerical values and ranked; that preferences are constant (criteria and their assigned weights do not change); and that the decision maker will choose the option with the highest rank (the maximum benefits). However, rationality does not require an assumption about the vacancy of conflict.
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