Jamie is employed as a commercial loan officer for a regional bank centered in the Midwestern section of the U.S. Her job falls into which one of the following areas of finance? |
Financial institutions |
Which one of the following is a working capital decision? |
How much cash should the firm keep in reserve? |
Which one of the following is an advantage of being a limited partner? |
Losses limited to capital invested |
Limited liability companies are primarily designed to: |
provide limited liability while avoiding double taxation. |
Which of the following are advantages of the corporate form of organization? 1 Ability to raise large sums of equity capital |
1, 2 and 4 |
Which one of the following best matches the primary goal of financial management? |
Increasing the market value of firm |
Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002? |
Increase protection against corporate fraud |
Which one of the following is most apt to align management’s priorities with shareholders’ interests? |
Compensating managers with shares of stock that must be held for 3 years before the shares can be sold |
Which of the following are potential ways to align management goals with shareholder interests? 1 Employee stock options |
All |
Which one of the following statements is correct? All secondary markets are dealer markets. |
All stock trades between existing shareholders are secondary market transactions. |
Choose the type of financial management decision that is relevant to each. Deciding whether to expand a manufacturing plant [x] |
X: Capital Budgeting Y: Capital structure Z: Working capital management |
What goal should always motivate the actions of the firm’s financial manager? |
Current market value(share price) of the equity |
Who owns a corporation? Describe the process whereby the owners control the firm’s management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context, what kinds of problems can arise? |
In the corporate form of ownership, the SHAREHOLDERS are the owners of the firm. The SHAREHOLDERS elect the BOARD OF DIRECTORS of the corporations, who in turn appoint the firm’s MANAGEMENT. This separation of ownership from control in the corporate form of organization is what causes agency problems to exist. Management may act in its own or someone else’s best interests, rather than those of the SHAREHOLDERS. If such events occur, they may contradict the goal of maximizing the share price of the equity of the firm. |
You’ve probably noticed coverage in the financial press of an initial public offering (IPO) of a company’s securities. Web search company Google is a relatively recent example. IPO is a [x] |
primary market transaction |
What does it mean when we say the New York Stock Exchange is an auction market? How are auction markets different from dealer markets? What kind of market is NASDAQ? |
In auction markets like the NYSE, BROKERS AND AGENTS meet at a physical location to buy and sell their assets. Markets like Nasdaq represent DEALERS operating in dispersed locales who buy and sell assets themselves, usually communicating with other dealers electronically or literally over the counter. |
Primary Market and examples |
Corporation is the seller and transactions raises money for the corporation. Public offerings and private placements. |
Secondary Market and examples |
Involves one owner or creditor selling to another. Usually the ones that provides the means for a transfering ownership of corporate securities. |
Which of the following statements about the corporate form of ownership is FALSE? a) The shareholders of are the owners of the firm and hold top priority claim among all stakeholders |
a) The shareholders of are the owners of the firm and hold top priority claim among all stakeholders |
Which of the following statements about the corporate form of ownership is FALSE? |
A. The shareholders are the owners of the firm and hold the top priority claim among all stakeholders. |
Fin 310 Chapter 1 HW-test Questions
Share This
Unfinished tasks keep piling up?
Let us complete them for you. Quickly and professionally.
Check Price