Question 1

The true owners of the corporation are the

Accepted Answer

A)  holders of debt issues of the firm. 
B)  preferred stockholders. 
C)  board of directors of the firm. 
D)  common stockholders. 
A)  holders of debt issues of the firm. 
B)  preferred stockholders. 
C)  board of directors of the firm. 
D)  common stockholders.

Question 2

The best form of business entity to attract new capital is the sole proprietorship because investors only need to deal with one owner.

Accepted Answer

A) True 
 B)False

Question 3

A limited liability company (LLC)is taxed like a partnership but provides limited liability for its owners similar to a corporation.

Accepted Answer

A) True 
 B)False

Question 4

Assume that an investor is offered a choice of a risk-free government bond or a high-risk corporate stock.Further assume that the expected return is the same for both.According to one of the axioms of finance,which investment would be chosen?

Accepted Answer

A)  the corporate stock 
B)  the government bond 
C)  neither, the investor would be indifferent 
D)  none of the above 
A)  the corporate stock 
B)  the government bond 
C)  neither, the investor would be indifferent 
D)  none of the above

Question 5

The payment of a dividend to current shareholders will have no impact on a corporation's share price because the cash paid is not available to future potential shareholders who may want to buy the corporation's stock.

Accepted Answer

A) True 
 B)False

Question 6

Shareholder wealth maximization means

Accepted Answer

A)  maximizing earnings per share. 
B)  maximizing dividends per share. 
C)  maximizing the price of existing common stock. 
D)  maximizing stockholders equity. 
A)  maximizing earnings per share. 
B)  maximizing dividends per share. 
C)  maximizing the price of existing common stock. 
D)  maximizing stockholders equity.

Question 7

The goal of the firm should be

Accepted Answer

A)  maximization of profits (net income per share). 
B)  maximization of shareholder wealth. 
C)  maximization of market share. 
D)  maximization of sales. 
A)  maximization of profits (net income per share). 
B)  maximization of shareholder wealth. 
C)  maximization of market share. 
D)  maximization of sales.

The true owners of the corporation are the

The best form of business entity to attract new capital is the sole proprietorship because investors only need to deal with one owner.

A limited liability company (LLC)is taxed like a partnership but provides limited liability for its owners similar to a corporation.

Assume that an investor is offered a choice of a risk-free government bond or a high-risk corporate stock.Further assume that the expected return is the same for both.According to one of the axioms of finance,which investment would be chosen?

The payment of a dividend to current shareholders will have no impact on a corporation's share price because the cash paid is not available to future potential shareholders who may want to buy the corporation's stock.

Shareholder wealth maximization means

The goal of the firm should be

The Financial Markets and Interest Rates

Understanding Financial Statements and Cash Flows

Evaluating a Firms Financial Performance

The Time Value of Money

The Meaning and Measurement of Risk and Return

The Valuation and Characteristics of Bonds

The Valuation and Characteristics of Stock

The Cost of Capital

Capital-Budgeting Techniques and Practice

Cash Flows and Other Topics in Capital Budgeting

Determining the Financing Mix

Dividend Policy and Internal Financing

Short-Term Financial Planning

Working-Capital Management

Current Asset Management

International Business Finance

Filters

Exam 1: An Introduction to the Foundations of Financial Management

The true owners of the corporation are the

The best form of business entity to attract new capital is the sole proprietorship because investors only need to deal with one owner.

A limited liability company (LLC)is taxed like a partnership but provides limited liability for its owners similar to a corporation.

Assume that an investor is offered a choice of a risk-free government bond or a high-risk corporate stock.Further assume that the expected return is the same for both.According to one of the axioms of finance,which investment would be chosen?

The payment of a dividend to current shareholders will have no impact on a corporation's share price because the cash paid is not available to future potential shareholders who may want to buy the corporation's stock.

Shareholder wealth maximization means

The goal of the firm should be

The Financial Markets and Interest Rates

Understanding Financial Statements and Cash Flows

Evaluating a Firms Financial Performance

The Time Value of Money

The Meaning and Measurement of Risk and Return

The Valuation and Characteristics of Bonds

The Valuation and Characteristics of Stock

The Cost of Capital

Capital-Budgeting Techniques and Practice

Cash Flows and Other Topics in Capital Budgeting

Determining the Financing Mix

Dividend Policy and Internal Financing

Short-Term Financial Planning

Working-Capital Management

Current Asset Management

International Business Finance

Filters