Question 1

Which of these is the most effective way to encourage directors to make decisions that maximise the wealth of shareholders?

Accepted Answer

A) Make the directors shareholders in the firm. 
B) Impose fines on directors who fail to met predetermined earnings performance levels. 
C) Pay bonuses to the directors on the basis of the company's earnings performance. 
D) Reduce the number of non- executive board members. 
A) Make the directors shareholders in the firm. 
B) Impose fines on directors who fail to met predetermined earnings performance levels. 
C) Pay bonuses to the directors on the basis of the company's earnings performance. 
D) Reduce the number of non- executive board members.

Question 2

Which of the following is not an element of the Australian capital market?

Accepted Answer

A) The ASX 
B) The Commonwealth Government 
C) News Corporation 
D) The 'big four' banks 
A) The ASX 
B) The Commonwealth Government 
C) News Corporation 
D) The 'big four' banks

Question 3

Funds from the capital market flows to:

Accepted Answer

A) Investors and Corporations 
B) Corporations and Real Assets 
C) Investors and Real Assets 
D) All of the above 
A) Investors and Corporations 
B) Corporations and Real Assets 
C) Investors and Real Assets 
D) All of the above

Question 4

The time value of money concept says that a dollar to be received in the future is worth more than a dollar received today.

Accepted Answer

A) True 
 B)False

Question 5

The objective of maximising the total value of a company's shares does not maximise shareholders' wealth.

Accepted Answer

A) True 
 B)False

Question 6

Companies are owned by:

Accepted Answer

A) The chief executive officer 
B) Shareholders 
C) The board of directors 
D) Creditors 
A) The chief executive officer 
B) Shareholders 
C) The board of directors 
D) Creditors

Question 7

Firms should invest in projects that:

Accepted Answer

A) Earn the same return as the market return 
B) Earn a lower return than the market return 
C) Earn a higher return than the market return 
D) A and B 
E) A and C 
A) Earn the same return as the market return 
B) Earn a lower return than the market return 
C) Earn a higher return than the market return 
D) A and B 
E) A and C

Question 8

The principal- agent problem can arise because of a manager's concerns about all of the following except:

Accepted Answer

A) Company goals 
B) Personal wealth 
C) Job security 
D) Company- provided benefits 
A) Company goals 
B) Personal wealth 
C) Job security 
D) Company- provided benefits

Question 9

What is the name given to the problem arising due to the separation of control between shareholders and the equity they contribute?

Accepted Answer

A) The equity usage problem 
B) The manager remuneration problem 
C) The principal- agent problem 
D) The owners' interests problem 
A) The equity usage problem 
B) The manager remuneration problem 
C) The principal- agent problem 
D) The owners' interests problem

Question 10

What is the corporate objective?

Accepted Answer

A) To minimise shareholder wealth 
B) To maximise shareholder wealth 
C) To minimise capital 
D) To maximise capital 
A) To minimise shareholder wealth 
B) To maximise shareholder wealth 
C) To minimise capital 
D) To maximise capital

Question 11

Which of these are cash flow/s that may emanate from shares?

Accepted Answer

A) Capital losses 
B) Dividends 
C) Capital gains 
D) All of the above 
A) Capital losses 
B) Dividends 
C) Capital gains 
D) All of the above

Question 12

What are the three main decisions corporate managers must make to realise the corporate objective?

Accepted Answer

A) Investment decision,financing decision,and dividend decision 
B) Investment decision,wealth decision,and dividend decision 
C) Wealth decision,financing decision,and dividend decision 
D) Investment decision,financing decision,and wealth decision 
A) Investment decision,financing decision,and dividend decision 
B) Investment decision,wealth decision,and dividend decision 
C) Wealth decision,financing decision,and dividend decision 
D) Investment decision,financing decision,and wealth decision

Question 13

Capital structure decisions involve interaction between _________________

Accepted Answer

A) Corporations and the capital market 
B) Corporations and real assets 
C) Investors and the capital market 
D) Investors and real assets 
A) Corporations and the capital market 
B) Corporations and real assets 
C) Investors and the capital market 
D) Investors and real assets

Which of these is the most effective way to encourage directors to make decisions that maximise the wealth of shareholders?

Which of the following is not an element of the Australian capital market?

Funds from the capital market flows to:

The time value of money concept says that a dollar to be received in the future is worth more than a dollar received today.

The objective of maximising the total value of a company's shares does not maximise shareholders' wealth.

Companies are owned by:

Firms should invest in projects that:

The principal- agent problem can arise because of a manager's concerns about all of the following except:

What is the name given to the problem arising due to the separation of control between shareholders and the equity they contribute?

What is the corporate objective?

Which of these are cash flow/s that may emanate from shares?

What are the three main decisions corporate managers must make to realise the corporate objective?

Capital structure decisions involve interaction between _________________

A Review of Financial Mathematics

Valuation of Shares and Bonds

Capital Budgeting: Basic Techniques

Capital Budgeting: Further Issues

Risk and Return

Capital Asset Pricing Model

Company Cost of Capital

Australian Equities Market

The Pricing Efficiency of Capital Markets

Dividend Policy

Capital Structure Policy

Risk Management

Working Capital New

Filters

Exam 1: Preliminary Concepts

Which of these is the most effective way to encourage directors to make decisions that maximise the wealth of shareholders?

Which of the following is not an element of the Australian capital market?

Funds from the capital market flows to:

The time value of money concept says that a dollar to be received in the future is worth more than a dollar received today.

The objective of maximising the total value of a company's shares does not maximise shareholders' wealth.

Companies are owned by:

Firms should invest in projects that:

The principal- agent problem can arise because of a manager's concerns about all of the following except:

What is the name given to the problem arising due to the separation of control between shareholders and the equity they contribute?

What is the corporate objective?

Which of these are cash flow/s that may emanate from shares?

What are the three main decisions corporate managers must make to realise the corporate objective?

Capital structure decisions involve interaction between _________________

A Review of Financial Mathematics

Valuation of Shares and Bonds

Capital Budgeting: Basic Techniques

Capital Budgeting: Further Issues

Risk and Return

Capital Asset Pricing Model

Company Cost of Capital

Australian Equities Market

The Pricing Efficiency of Capital Markets

Dividend Policy

Capital Structure Policy

Risk Management

Working Capital New

Filters