Suppose that you are the manager and sole owner of a highly leveraged company. All the debt will mature in one year. If at that time the value of the company is greater than the face value of the debt, you will pay off the debt. If the value of the company is less than the face value of the debt, you will declare bankruptcy and the debt holders will own the company.
a) Express your position as an option on the value of the company.
b) Express the position of the debt holders in terms of options on the value of the company.
c) What can you do to increase the value of your position?

The face of a company is often that of the lowest paid employees who meet the customers. select one: true false

When randy, a general manager of a national retailer, moved to a different store in his company that was having difficulty, he knew that sales were low and after talking to his employees, he found morale was also low. at first randy thought attitudes were poor due to low sales, but after working closely with employees, he realized that the poor attitudes were actually the cause of poor sales. randy was able to discover the cause of the problem by utilizing skills.

6. why the aggregate supply curve slopes upward in the short run in the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. several theories explain how this might happen. for example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. consider a soybean farmer who expects a price level of 100 in the coming year. if the actual price level turns out to be 90, soybean prices will , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. if other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.