Question 1

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

Accepted Answer

A) 2010 
B) 2012 
C) 2013 
D) Net new equity has been negative from 2010 to 2013. 
A) 2010 
B) 2012 
C) 2013 
D) Net new equity has been negative from 2010 to 2013.

Question 2

A warrant is a type of option.

Accepted Answer

A) True 
 B)False

Question 3

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.)

Accepted Answer

A) 500,000 
B) 200,000 
C) 100,000 
D) 1,000,000 
A) 500,000 
B) 200,000 
C) 100,000 
D) 1,000,000

Question 4

Internal funds constitute the majority of corporate financing in the following countries:

Accepted Answer

A) the United States only. 
B) the United States and the UK. 
C) the United States,the UK, and Germany. 
D) the United States,the UK, Germany, and Japan. 
A) the United States only. 
B) the United States and the UK. 
C) the United States,the UK, and Germany. 
D) the United States,the UK, Germany, and Japan.

Question 5

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

Accepted Answer

There are many possible answers to this

Question 6

The following are debts in disguise:

Accepted Answer

A) accounts payable. 
B) leases. 
C) underfunded pensions. 
D) accounts payable,leases, and underfunded pensions. 
A) accounts payable. 
B) leases. 
C) underfunded pensions. 
D) accounts payable,leases, and underfunded pensions.

Question 7

Which of the following investments allows investors to own assets indirectly via shares that are part of a pool of other investors?

Accepted Answer

A) REIT only 
B) REIT and royalty trust 
C) REIT, royalty trust, and option 
D) Option 
A) REIT only 
B) REIT and royalty trust 
C) REIT, royalty trust, and option 
D) Option

Question 8

Indicate the major sources of finance available to corporations.

Accepted Answer

The major sources of finance a

Question 9

A modification to the company charter that requires 75 percent shareholder approval for a merger is called a

Accepted Answer

A) majority voting amendment. 
B) cumulative voting amendment. 
C) proxy voting amendment. 
D) supermajority amendment. 
A) majority voting amendment. 
B) cumulative voting amendment. 
C) proxy voting amendment. 
D) supermajority amendment.

Question 10

If a bond is junior or subordinated, it

Accepted Answer

A) has a higher priority status than specified creditors. 
B) has been issued because the company is in default. 
C) must give preference to senior creditors in the event of default. 
D) is secondary to equity. 
A) has a higher priority status than specified creditors. 
B) has been issued because the company is in default. 
C) must give preference to senior creditors in the event of default. 
D) is secondary to equity.

Question 11

Consider the aggregate balance sheet for manufacturing corporations in the United States.Which of the following sources of financing plays the largest role?

Accepted Answer

A) Current liabilities 
B) Long-term debt 
C) Stockholders' equity 
D) Each of the sources plays an equal role. 
A) Current liabilities 
B) Long-term debt 
C) Stockholders' equity 
D) Each of the sources plays an equal role.

Question 12

Compared to normal bondholders, convertible bondholders have a greater interest in seeing the firm's stock price increase.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

LIBOR stands for London Interbank Offered Rate.

Accepted Answer

A) True 
 B)False

Question 15

In the case of Google, which has issued Class A and Class B shares,

Accepted Answer

A) both classes of shares have the same cash-flow rightsand both classes of shares have the same control rights. 
B) both classes of shares have the same control rights and both classes of shares have different cash-flow rights. 
C) both classes of shares have the same cash-flow rights and both classes of shares have different control rights. 
D) both classes of shares have different cash-flow rights and both classes of shares have different control rights. 
A) both classes of shares have the same cash-flow rightsand both classes of shares have the same control rights. 
B) both classes of shares have the same control rights and both classes of shares have different cash-flow rights. 
C) both classes of shares have the same cash-flow rights and both classes of shares have different control rights. 
D) both classes of shares have different cash-flow rights and both classes of shares have different control rights.

Question 16

Which of the following statements about partnership and limited liability is (are) true?

Accepted Answer

A) All the partners in a partnership can have limited liability and general partners in a partnership cannot have limited liability. 
B) All the partners in a partnership can have limited liability, general partners in a partnership cannot have limited liability, and general partners in a partnership can be corporations. 
C) General partners in a partnership cannot have limited liability, general partners in a partnership can be corporations, and only limited partners in a partnership can have limited liability. 
D) All the partners in a partnership can have limited liability and general partners in a partnership can be corporations. 
A) All the partners in a partnership can have limited liability and general partners in a partnership cannot have limited liability. 
B) All the partners in a partnership can have limited liability, general partners in a partnership cannot have limited liability, and general partners in a partnership can be corporations. 
C) General partners in a partnership cannot have limited liability, general partners in a partnership can be corporations, and only limited partners in a partnership can have limited liability. 
D) All the partners in a partnership can have limited liability and general partners in a partnership can be corporations.

Question 17

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

Accepted Answer

There are several important features tha

Question 18

Which of the following characteristics do not apply to financial intermediaries?

Accepted Answer

A) They raise money from investors. 
B) They raise money from investors and they invest in financial assets. 
C) They invest in financial assets. 
D) They mainly invest in real assets. 
A) They raise money from investors. 
B) They raise money from investors and they invest in financial assets. 
C) They invest in financial assets. 
D) They mainly invest in real assets.

Question 19

U.S.firms, in general, have been repurchasing shares and thus net equity issues have been negative.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 14: An Overview of Corporate Financing

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

A warrant is a type of option.

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.)

Internal funds constitute the majority of corporate financing in the following countries:

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

The following are debts in disguise:

Which of the following investments allows investors to own assets indirectly via shares that are part of a pool of other investors?

Indicate the major sources of finance available to corporations.

A modification to the company charter that requires 75 percent shareholder approval for a merger is called a

If a bond is junior or subordinated, it

Consider the aggregate balance sheet for manufacturing corporations in the United States.Which of the following sources of financing plays the largest role?

Compared to normal bondholders, convertible bondholders have a greater interest in seeing the firm's stock price increase.

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

LIBOR stands for London Interbank Offered Rate.

In the case of Google, which has issued Class A and Class B shares,

Which of the following statements about partnership and limited liability is (are) true?

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

Which of the following characteristics do not apply to financial intermediaries?

U.S.firms, in general, have been repurchasing shares and thus net equity issues have been negative.

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

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 Risk

Financial Analysis

Financial Planning

Working Capital Management

Mergers

Corporate Restructuring

Governance and Corporate Control Around the World

Filters