Question 1

Shares held by investors are known as:

Accepted Answer

A) issued but not outstanding 
B) issued and outstanding 
C) authorized shares 
D) treasury stock 
A) issued but not outstanding 
B) issued and outstanding 
C) authorized shares 
D) treasury stock B

Question 2

Which of the following investments allows investors to own assets indirectly via shares that are part of a pool of other investors?
i.REIT; II)trust; III)option

Accepted Answer

A) I only 
B) I and II only 
C) I,II,and III 
D) III only 
A) I only 
B) I and II only 
C) I,II,and III 
D) III only B

Question 3

Debt that comes due after one year is called long-term debt.

Accepted Answer

A) True 
 B)False  True

Question 4

Dual-class shares are often created to give one group of owners more control rights over the company than another group.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is NOT a sensible reason for a firm to rely on internal funds?

Accepted Answer

A) Equity issues are generally expensive. 
B) A new bond issue may drive the firm's debt ratio too high. 
C) Financial markets interpret the issuance of equity unfavorably. 
D) All of the these are sensible reasons to rely on internal funds. 
A) Equity issues are generally expensive. 
B) A new bond issue may drive the firm's debt ratio too high. 
C) Financial markets interpret the issuance of equity unfavorably. 
D) All of the these are sensible reasons to rely on internal funds.

Question 6

U.S.dollars deposited in a German bank are called:

Accepted Answer

A) Deutsche dollars. 
B) American depositing receipts. 
C) Eurodollars. 
D) mark dollars. 
A) Deutsche dollars. 
B) American depositing receipts. 
C) Eurodollars. 
D) mark dollars.

Question 7

Exploitation of minority shareholders by majority shareholders is called:

Accepted Answer

A) a reverse stock split. 
B) tunneling. 
C) financial engineering. 
D) proxy fighting. 
A) a reverse stock split. 
B) tunneling. 
C) financial engineering. 
D) proxy fighting.

Question 8

Briefly discuss some of the features that would increase the value of a corporate bond.

Accepted Answer

There are several important features tha

Question 9

The maximum number of shares a firm can issue is known as:

Accepted Answer

A) number of shares issued but not outstanding. 
B) number of shares issued and outstanding. 
C) number of authorized shares. 
D) number of treasury shares. 
A) number of shares issued but not outstanding. 
B) number of shares issued and outstanding. 
C) number of authorized shares. 
D) number of treasury shares.

Question 10

A warrant is a type of option.

Accepted Answer

A) True 
 B)False

Question 11

In the case of Google,which has issued Class A and Class B shares:
I.both classes of shares have the same cash-flow rights;
II.both classes of shares have the same control rights;
III.both classes of shares have different cash-flow rights;
IV.both classes of shares have different control rights

Accepted Answer

A) I and II only 
B) II and III only 
C) I and IV only 
D) III and IV only 
A) I and II only 
B) II and III only 
C) I and IV only 
D) III and IV only

Question 12

The rare event in which a firm's existing directors and management compete with outsiders for the effective control of the corporation is called a:

Accepted Answer

A) majority vote. 
B) supermajority amendment. 
C) proxy contest. 
D) merger. 
A) majority vote. 
B) supermajority amendment. 
C) proxy contest. 
D) merger.

Question 13

Typically,the book value of shareholders' equity equals:

Accepted Answer

A) total assets minus current liabilities. 
B) total assets minus net worth. 
C) the sum of preferred stock,debt,and the par value of equity. 
D) the sum of the par value of common stock,additional paid-in capital,and accumulated retained earnings. 
A) total assets minus current liabilities. 
B) total assets minus net worth. 
C) the sum of preferred stock,debt,and the par value of equity. 
D) the sum of the par value of common stock,additional paid-in capital,and accumulated retained earnings.

Question 14

Recently,which of the following sources of funds has played the greatest role in the financing of U.S.nonfinancial firms?

Accepted Answer

A) internal funds 
B) net equity issues 
C) net borrowing 
D) all of the sources were approximately the same 
A) internal funds 
B) net equity issues 
C) net borrowing 
D) all of the sources were approximately the same

Question 15

In the United Sates,who holds the smallest portion of corporate equities?

Accepted Answer

A) households 
B) pension funds 
C) mutual funds 
D) insurance companies 
A) households 
B) pension funds 
C) mutual funds 
D) insurance companies

Question 16

Investors who purchased shares from the Facebook IPO did so in which market?

Accepted Answer

A) primary market 
B) secondary market 
C) over-the-counter market 
D) NYSE 
A) primary market 
B) secondary market 
C) over-the-counter market 
D) NYSE

Question 17

The maximum number of shares that can be issued by a firm is called:

Accepted Answer

A) Treasury stock. 
B) outstanding shares. 
C) authorized shares. 
D) none of the options. 
A) Treasury stock. 
B) outstanding shares. 
C) authorized shares. 
D) none of the options.

Question 18

Eurobonds are almost always denominated in euros.

Accepted Answer

A) True 
 B)False

Question 19

Internal funds constitute the majority of corporate financing in the following countries:
I.U)S.
II.U.K.
III.Germany
IV.Japan

Accepted Answer

A) I only 
B) I and II only 
C) I,II,and III only 
D) I,II,III,and IV 
A) I only 
B) I and II only 
C) I,II,and III only 
D) I,II,III,and IV

Question 20

Which of the following are NOT usually regarded as investment funds?

Accepted Answer

A) mutual funds 
B) insurance companies 
C) pension funds 
D) hedge funds 
A) mutual funds 
B) insurance companies 
C) pension funds 
D) hedge funds

Exam 14: An Overview of Corporate Financing

Shares held by investors are known as:

Which of the following investments allows investors to own assets indirectly via shares that are part of a pool of other investors? i.REIT; II)trust; III)option

Debt that comes due after one year is called long-term debt.

Dual-class shares are often created to give one group of owners more control rights over the company than another group.

Which of the following is NOT a sensible reason for a firm to rely on internal funds?

U.S.dollars deposited in a German bank are called:

Exploitation of minority shareholders by majority shareholders is called:

Briefly discuss some of the features that would increase the value of a corporate bond.

The maximum number of shares a firm can issue is known as:

A warrant is a type of option.

In the case of Google,which has issued Class A and Class B shares: I.both classes of shares have the same cash-flow rights; II.both classes of shares have the same control rights; III.both classes of shares have different cash-flow rights; IV.both classes of shares have different control rights

The rare event in which a firm's existing directors and management compete with outsiders for the effective control of the corporation is called a:

Typically,the book value of shareholders' equity equals:

Recently,which of the following sources of funds has played the greatest role in the financing of U.S.nonfinancial firms?

In the United Sates,who holds the smallest portion of corporate equities?

Investors who purchased shares from the Facebook IPO did so in which market?

The maximum number of shares that can be issued by a firm is called:

Eurobonds are almost always denominated in euros.

Internal funds constitute the majority of corporate financing in the following countries: I.U)S. II.U.K. III.Germany IV.Japan

Which of the following are NOT usually regarded as investment funds?

Introduction to Corporate Finance

How to Calculate Present Values

Valuing Bonds

The Value of Common Stocks

Net Present Value and Other Investment Criteria

Making Investment Decisions With the Net Present Value Rule

Introduction to Risk and Return

Portfolio Theory and the Capital Asset Pricing Model

Risk and the Cost of Capital

Project Analysis

Investment, Strategy, and Economic Rents

Agency Problems, Compensation, and Performance Measurement

Efficient Markets and Behavioral Finance

How Corporations Issue Securities

Payout Policy

Does Debt Policy Matter

How Much Should a Corporation Borrow

Financing and Valuation

Understanding Options

Valuing Options

Real Options

Credit Risk and the Value of Corporate Debt

The Many Different Kinds of Debt

Leasing

Managing Risk

Managing International Risks

Financial Analysis

Financial Planning

Working Capital Management

Mergers

Corporate Restructuring

Governance and Corporate Control Around the World

Filters