finance 3312 test 1 lesseig

The primary goal of financial management is most associated with increasing the

market value of the firm

What is the primary goal of financial management for a sole proprietorship?

maximize the market value of the equity

Which one of the following situations is most apt to create an agency conflict?

Basing management bonuses on the length of employment

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 a minimum of three years

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

agency

The shareholders of Weil's Markets would benefit if the firm were to be acquired by Better Foods. However, Weil's board of directors rejects the acquisition offer. This is an example of

agency conflict

When conducting a financial analysis of a firm, financial analysts

frequently use accounting information

A corporation

is a legal entity separate from its owners

An agency issue is most apt to develop when

the control of a firm is separated from the firm's ownership

The primary goal of financial management is to maximize

the market value of existing stock