Exam 14: An Overview of Corporate Financing

Indicate the major sources of finance available to corporations.

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

The single European currency established by the European Union is called the euro.

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

Which of the following instruments gives the owner the right to purchase securities directly from the firm at a fixed price during a specified period of time?

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.

The following are debts in disguise except: I.accounts payable II.leases III.underfunded pensions

During which year have U.S.nonfinancial firms raised positive net equity?

In the United States the premium that an investor needed to pay to gain voting control is:

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 cumulative voting?

Shares of stock that have been repurchased by the corporation are called:

Which voting system is most friendly towards minority shareholders?

Explain how shareholders might have lost control over corporations,relative to managers,over the years.

Briefly describe the different types of financial markets.

Preference in position among creditors when it comes to repayment is called:

The following are characteristics of preferred stock except: I.pays fixed dividends; II.can demand payments of cumulative dividends; III.has voting rights

If a bond is junior or subordinated,it:

A corporation has 1,000,000 shares outstanding,and 10 directors are up for election.If the stock features cumulative voting,approximately how many shares do you have to muster in order to guarantee yourself a place on the board of directors? (Ignore possible ties.)

Which of the following are NOT financial intermediaries?

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