Which of the following are NOT ways risk management can be used to increase the value of a firm?
A)Risk management can help a firm maintain its optimal capital budget.
B)Risk management can reduce the expected costs of financial distress.
C)Risk management can help firms minimize taxes.
D)Risk management can allow managers to defer receipt of their bonuses and thus postpone tax payments.

Question

Quizplus · Accepted Answer

Risk management strategies are primarily focused on the financial and operational aspects of a firm to protect its value and ensure sustainability. While they can help maintain optimal capital budgets, reduce financial distress costs, and minimize taxes, they are not designed to manage personal compensation strategies such as deferring managers' bonuses to postpone tax payments. This choice does not align with the primary objectives of corporate risk management.

Which of the Following Are NOT Ways Risk Management Can