Exam 14: An Overview of Corporate Financing

The following functions are provided by financial intermediaries for the smooth functioning of the economy: I. The payment mechanism II) Borrowing and lending III. Pooling risk

Indicate important sources of finance available to corporations.

If a group of outsiders solicits the authority to vote shares to replace existing management, then it is called a:

The maximum number of shares that can be used is known as the authorized share capital.

If you own 1,000 shares of common stock of a firm and there are five directors being elected, What is the maximum number of votes you can cast for a particular director under majority voting?

Generally, managers of corporations prefer internally generated cash to finance their capital expenditures because: I. They can avoid the discipline of the financial markets II. The costs of issuing new securities are high III. The announcement of new equity issue is usually bad news for investors

A firm has $100 million in current liabilities, $200 million in total long-term liabilities and $300 million in stockholders' equity, total assets of $600 million. Calculate the long-term debt ratio for the firm.

The market value of equity is calculated as:

A warrant is nothing but an option.

Dollars deposited in the USA by Europeans are called Eurodollars.

A corporate bond that can be exchanged for a fixed number of shares of stock is called a:

Which of the following statements about partnership and limited liability is(are) true? I) all the partners in a partnership can have limited liability II) general partners in a partnership cannot have limited liability III) general partners in a partnership can be corporations IV) only limited partners in a partnership can have limited liability