MIE201 test 2

SBA financing methods (3)

- SBA loans - SCORE +++ microlender nonprofit based - SBIC +++ small business investment companies +++ gen. when angel or VC/s don't want to invest

methods of support for business owners

- govt. agencies & nonprofits - business partners - mentors & adviosry boards - print & online media

A collection of individuals with specific skills or significant connections who assist a company owner with the evaluation of strategies and decisions are known as​ _______. A.advisory boards B. angel investors C.venture capitalists D.franchisors E.business incubators

A

Which of the following identifies who is authorized to speak for the​ company? A.Communications plan B.Launch plan C.Contingency plan D.Balanced scorecard E.Control cycle

A

Which of the following is a means of observing and measuring company functions from the​ financial, operations,​ consumer, and development​ perspectives? A.Balanced scorecard B.Employee empowerment C.Benchmarking D.​Laissez-faire system E.Crisis management

A

Which of the following is also called par​ value? A.Face value B. Intrinsic value C.Market value D.Book value E.Dividend value

A

Which of the following represents a legal​ body, separate from any​ individual, that can possess property and conduct​ business? A.Corporation B.Partnership C.Master limited partnership D.Limited liability company E.Sole proprietorship

A

If an investor wants to invest in a fund that ensures growth by a specific​ date, which type of fund might the investor​ consider? A.Bond funds B.Socially responsible funds C.​Target-date funds D.Balanced funds E.Income funds

C

Susan operates and owns a small business from home in her own name.​ Susan's business is most likely a​ _______. A. partnership B. corporation C. sole proprietorship D.limited liability company E.master limited partnership

C

Which aspect of a business plan explains the intentions of the company and what it plans to​ accomplish? A.Advertising strategy B.Operational plan C.Mission D.Economic forecasts E.Financial projections

C

Which of the following is the major competitor of the​ NYSE? A.Regional exchange B.Bond exchange C.NASDAQ D.Money market E.Over the counter

C

A(n) ____________ is a business that authorizes components of its business structure for use by other businesses for an initial​ start-up fee and monthly royalties. A.franchisee B.angel investor C.franchise D.franchisor E. venture capitalist

D

Steve is a manager at​ TCM, Inc. Over the​ years, Steve has established a bad reputation as a​ power-hungry manager because he insists on controlling the decisions of the company without respect to employee input. Employees often feel like their opinions do not matter and that their choices become even more limited year after year. Which of the following describes​ Steve's leadership​ style? A.Participative leader B.Democratic leader C.Collaborative leader D.Autocratic leader E.​Laissez-faire leader

D

When the stock market has a​ long-term trend of falling​ prices, what type of market is said to be taking​ place? A. Bull market B.Asset allocation market C.Short selling D.Bear market E.Stop order

D

What is an advantage of operating a sole​ proprietorship? A.Limited managerial perspective B.Financial liability C.Resource limitations D.Demands on owner E.Fewer limitations on personal income

E

margin trading

buy w/ borrowed $$

coaching vs. mentoring

coaching - mtg. w/ employees - discussing problems - offering suggestions - encouraging solutions *** outside help *** mentoring - guiding employees - explaining office politics - serve as role models - providing valuable advice ** in business; no cost**

acquisitions

company buys a controlling interest in the voting stock on another company - mostly agree, can be a hostile takeover

intrapreneurship & their barriers

entreprenurship efforts in a larger organization Barriers - companies = more analytical, deliberate, structured, and careful as they mature - mechanism put in place to stop mistakes from occuring - habits

mission vs. vision vs. value statements

mission - what company actually does - easy to memorize vision - what company aspires to be - help drive decisions & goals values - support vision, shape culture, reflect companies principles

entrepreneurial spirit

positive, forward-thinking desire to create profitable, sustainable business enterprises

price-earnings ratio

price (1 share)/ earnings (per share) earnings: money made/ # shares - tells how much investors in a stock are willing ot pay per dollar of earnings from the stock

define SWOT analysis

process that identifies an organizations - strengths - weaknesses - opportunities - threats and assess them to make the company better S&W: within your brand O&T: technology, competitors, outside compnay

public v. private corporation

public - many shareholders - publically traded private - few shareholders - not publically traded

maturity date

when they have 2 pay you back corporate bonds

AAA Cars and Best​ Cars, two​ auto-parts manufacturers, have just signed a​ long-term partnership to jointly produce and sell their products. This is an example of which of the​ following? A.Strategic alliance B.Merger C.Joint venture D.Leveraged buyout E.Consolidation

A

If a corporation has issued a stock that​ doesn't meet listing requirements of a particular​ exchange, how is the stock​ sold? A.Over the counter B. On the NYSE C.On an international exchange D.On a regional exchange E.On the NASDAQ

A

Imagine that ABC and​ NBC, two publicly traded​ companies, have just decided to merge their operations. When the merger between these firms takes​ place, which type of organizational culture clash is LEAST likely to​ occur? A.Stock valuation B.Workplace atmosphere C.Corporate values D.Management styles E.Communication practices

A

Jessica works for ABC Shoes. At​ ABC, Jessica is responsible for establishing​ structure, strategic​ goals, and guiding her employees. She is also responsible for making​ long-range plans and establishing major policies. She often works long hours and is frequently faced with making difficult choices in order to better ABC. Jessica is a​ __________. A.top manager B.first-line manager C.middle manager D.mentor E.coach

A

Moving decision making as far down the organizational pyramid as possible by empowering employees to make decisions about particular situations is part of which managerial​ role? A.Decisional B.Interpersonal C.Forecasting D.Informational E.Analytical

A

The​ optimistic, progressive aspiration to establish​ lucrative, sustainable business ventures is known as​ ________. A.entrepreneurial spirit B.high-growth venture C. angel investing D. crowdfunding E. intrapreneurship

A

Top management differs from lower management tiers in terms of​ (1) long time frames within which executives must work and​ (2) _______________. A.the magnitude of their decision B.their ability to implement action plans C.their ability to manage managers D.their coworker relationships E.their ability to manage workers

A

What type of skills lets a manager​ communicate, work​ effectively, motivate, and lead​ others? A.Interpersonal skills B.Decision-making skills C.Conceptual skills D.Administrative skills E.Technical skills

A

When you tell your broker to buy a stock at the best price that can be negotiated at the​ moment, it is called a​ _____. A.market order B.face value order C.credit order D.stop order E.limit order

A

Which of the following terms describes various accommodations containing small companies and offering support services during a​ company's early growth​ phases? A.Business incubators B.Franchisors C.Microlenders D.Crowdfunder E.Franchisees

A

A complete definition of corporate governance is​ ________. A.the description of responsibilities and performance of the board of directors B.a description of all the​ policies, procedures,​ relationships, and systems in place to oversee the successful and legal operation of the enterprise C.one that is of vital concern for society as a​ whole, not just for the individual companies themselves D.a description of how shareholders who own common stock conduct business E.a description of how shareholders elect a board of directors to represent them

B

When the price of a stock is out of line with similar​ stocks, how can board members bring the price back in​ line? A.Dilution of the stock B.Splitting the stock C. Resetting par value D.Stock buyback E.Adjusting book value

B

Which of the following enables the buyer to use a larger​ company's trade name and sell its goods or services in a specific​ territory? A.Product franchisor B.Franchise C.Manufacturing franchisor D.Franchisor E.Franchisee

B

Which of the following represents lawfully binding contracts to buy or sell a monetary instrument for a set price at some date in the​ future? A.Hedge funds B.Financial futures C. Credit derivatives D.Options E.Derivatives

B

Which term defines a company that is generally not a leader in its​ industry; is individually​ owned, managed, and​ maintained; and characteristically has fewer than 500​ employees? A.Venture capitalist B.Microlender C. Small business D.Franchise E.Business incubator

C

__________ involves​ individuals' ability to handle their feelings and impulses​ effectively, resulting in increasing levels of empathy. A.Social intelligence B.Benchmarking C.Emotional intelligence D.Coaching E.Cognitive intelligence

C

____________ involve an​ individual's ability to comprehend that an organization is made up of several interrelated areas that need to work together to ensure success in business ventures and to make strategic choices. A.Technical skills B.Interpersonal skills C.Conceptual skills D.Administrative skills E.​Decision-making skills

C

______________ of leaders include​ gathering, analyzing, and communicating various materials for the company both internally and externally. A.Technical roles B.Administrative roles C.Informational roles D.Interpersonal roles E.Decisional roles

C

A(n) ____________ is a concise and motivational description of what a company is striving to become. A.goal B.mission statement C.value statement D.vision statement E.objective

D

Limited Partnership

MLP - master limited - sell units, no double taxer - most energy companies slow growing tax adv. LLP - limited liability - unliable for OUR actions - "who" varies by state 4 definition - ex. doctors, dentists, accountants, etc. ( ppl w/ own clients )

adv. & disadv. of franchising

adv. - be your own boss, hire own employees, benefit directly from your hardwork - if successful franchisor, you know it has worked before - already have brand recognition - support network - site location, mkt. research, training, & diff. types of aid disadv. - lack of control - have to follow business format - upfront payment & reg. payments to franchisor based on sales revenue

merger & acquisitions adv. & disadv.

adv. - expansion tool - increase buying power bc larger - increase revenue from cross-product selling - increase market share - reduce overlapping investments & capacities to lower ongoing costs Disadv. - executive plan agreements - leadership decisions/layoffs & job changes - new marketing - incompatible systems

corporation

adv. - limited liability - access to capital - increased liquidity ( cash; assets that are tangible) disadv. - excess paperwork - burdensome costs - double taxation - disclosure requirements - loss of control - short term orientation - enter into contracts - buy & sell property - sue & be sued - ownership : + shareholders ( vote 4 ppl) + stock certificates ( gen. online)

partnership

adv. - simplicity/ easy to form - single layer taxes - more resources - cost sharing - broader skill & experience base - longevity Disadv. - unlimited liablility - potential for conflict - expansion, succession, termination issues

SCORE

aided by SBA - free counseling and resources to people interested in starting or growing a small business .

general partnership

all equal partnerships - share ownership - unlimited liability

mutual funds

an investment program funded by shareholder that trades in diversified holdings & is professionally managed adv. - diversify - prof. management - simplify decisions disadv. - cost ++ load: up front ++ unload: based on $ - performance

market order

best price

adv/ disadv. of bonds vs. stocks

bond adv. - less risky - less chance investment will decline - predictable rate - regular source of income bond disadv. - lower avg. returns - bond can be downgraded - defaults/junk - call provision

bull vs. bear market

bull - analyst believe it will go up bear - analyst believe it will go down (inflation)

limit order

buy a stock @ a certain price or better

face value

corporate bond amount

corporate bonds

debt security issued by a corp. & sold to investors - higher risk than govt. bonds - higher interest rates

bond types (5) diff mainly by ________

diff. by timeperiods 1. treatury bills (tbills) - short-term 2. treasury notes - few years 3. treasury bonds - more years than notes 4. US savings bonds - more than 20 years; dont pay much 5. municipal bonds - state, county, city bonds

business plan

document summarizing a proposed busines venture, goals, and plans for achievement includes - summary - mission & obj. - company overview - products or services - management & key personnel - target mkt. - mkting strategy - design & development plan - operations plan - start-up schedule - major risk factors - financial projections & requirements - exit strategy

corporate governance

elect : common shareholders & board of directors appoint: board of directors & corporate officers hire: corporate officers & employees of the company Common shareholders -individuals - companies - non-profits - persions - mutual funds Board of directors - dividends - corporate affairs - strategic plans - select officers - finances Corporate officers - chief executives - chief financial - chief info. - chief technology - chief operations employees of the company - operations - finance - marketing - HR - engineering

tactical plan vs. operational plan

tactical - plans that define the actions & resources to achieve tactical obj. & support strategic plans operational - plans that lay out the actions & the resource allocation needed to achieve operational obj. & to support tactical plans

merger & acquisition defense measures

tender offer - raider (buyer) buys certain stock amt. @ price gen. more than reg. price - hope: get enough shares to overtake directors proxy fight - public relations battle w/ shareholders to get enough ppl to vote w/ them poison pill defense - makes a move to make their company less valuable to overtaking company - ex. sell stock to holders below mkt. value white knight tactic - 3rd company invited to acquire a company that's endangered of being swallowed up by the takeover

venture capitalist vs. angel investors

vc: - investors who provide $ to finance new businesses/ turnarounds in exchange for a portion of ownership - obj. = resell the business as a profit AI: - private individuals who invest $ in start-ups, gen @ beginning of business life - smaller amounts than VCs or banks

yield

% of income return on a corporate bond

secondary financial market

- stock exchange ++ facilitate buying & selling

primary financial market

- 1st time public - initial public offering (IPO) ++++ rich ppl get 1st bid; b/t entreprenuers & investment bank to increase price - stocks & bonds - investment bankers

partnership agreement

- division of profits - dispute resolution - decision making authority - expected contribution

downsizing & outsourcing effect on small business development

- have little to lose, so many start their company then - realease entreprenuer ideas - outsourcing could be given to small businesses or could be subcontractor for projects

3 types of stock valuation

1. book value - original value 2. mkt. value - what its worth today/rn 3. intrinsic value - what its really worth according to accountant ++ takes into account brand, finances, etc. - broadest measure

diff. types of intelligence (3)

1. cognitive - IQ, ability to learn 2. emotional - maturity in pain, setting aside emotional outburst 3. social - knowing how to act in diff. enviornments

Successful entrepreneurs qualities (3)

1. confidence - like to control - curious to learn to achieve goal - failure= growth - adaptable - sensible riskers 2. passion - success isn't monetary - relatable - talent for inspiring 3. drive - work hard for sustained periods of time - extremely disciplined - willing to make sacrifices in other areas

why ppl start their own businesses (5)

1. control over future 2. tired of working for someone else 3. new product ideas 4. pursue business goals important to them on a personal level 5. inability to find attractive employment elsewhere

strategic planning process steps (6)

1. define mission, vision, & values 2. peform SWOT analysis 3. develop forecasts 4. analyze competition 5. est. goals & obj. 6. develop action plans

Managerial roles (3)

1. interpersonal 2. informational 3. decisional

diff. leadership styles (3)

1. laissez-faire - got time & budget to get stuff done (no leadership) 2. autocratic - idc what you think, I'll tell you what to do 3. democratic - ask what you think, but I still make the final decision

consolidation (4)

1. mergers - combine 2+companies 2. hostile takeover - takeover not approved by company being taken over - through secret stock purchase 3. leverage buyouts (debt) - purchase of a controlling share in a company by its management, using outside capital 4. acquisitions - asset/obj. bought or obtained ( ex. museum)

mutual funds choices (12)

1. money market - savings account w/ restrictions; pays more than savings account 2. growth - companies growing w/ high profit desire 3. value - low stock price w/ high possibility 4. income (bonds) 5. balanced 6. sector 7. target date 8. global - all countries 9. international - fund outside USA 10. socially responsible 11. index 12. ETFs - small stocks to buy ownership w/ - exchange trade funds

derivatives (5)

1. options - pay fee but don't have to go through it 2. financial futures - contract to buy @ later date @ same price 3. commodities futures - oil, pork, corn (bulk) set bid price 4. currency futures - lock in exchange rate 5. credit futures future: locking in price now to pay later

managerial functions (4)

1. planning 2. leading 3. organizing 4. controlling

special corporation types (6)

1. subchapter "s" corporation - sell shares & pay personal tax; USA owned & not huge 2. limited liability (LLC) - sell stock & get % of profits & file personal tax (more diff. to get big & big $) 3. subsidiary corp. - wholely or particularly owned by another company 4. alien v. foreign - A= inc. outside country - F= inc. outside state company's in 5. Benefit "b" corporation - specifically puts in mission statement about being enviornmentally friendly - help someone/thing 6. domestic corp. - only inc. & does business in 1 state; less fees & don't mess w/ feds

levels of management (top to bottom)

1. top managers + CEO, CP, president 2. middle managers + controller, manager, director 3. first-line managers + supervisor, dpt. head

merger

2 companies join to become 1 - or consolidation where they make a separate company types - vertical: up & down companies that help w/ their manufacturing - horizontal: take control of opposing companies

failure rate of small businesses & reasons

70-90% fail - 60% after 4 years reasons - leadership issues +++ incompetence +++ lack of strategic planning +++ lack of relevent experience +++ bad role transition - mkt. & sales issues +++ ineffective +++ uncontrolled growth +++ overreliance on 1 customer - financial issues +++ inadequate financing +++ poor cash management +++ too much overhead - systems & facilities issues +++ poor location +++ poor inventory control

sole proprietorship

Adv. - ease of est. - work for yourself (control, pay) - tax adv. ( one layer) - privacy Disadv. - unlimited liability (all assets) - finite life span - limited capital available - limited experience - demands on owner(no benefits) - not paid on company payroll - few limits - keep all profits

​A(n) __________ is an​ expansive, long-term achievement that the organization wishes to attain. A.value statement B.goal C.objective D.mission statement E.vision statement

B

General Motors​ (GM) is the largest United States-based auto manufacturing corporation. Who is the highest ranking officer at​ GM? A. Chief information officer B.Chief financial officer C.Chief executive officer D.Chairman of the board E.Chief operating officer

C

The practice of engaging outside firms to handle individual projects or business functions is called​ what? A.High-growth ventures B.Lifestyle businesses C. Outsourcing D. Small business E. ​E-commerce

C

common vs. preferred stock

Common: - risk & voluntarily - uncertainty - realize captial gains - income from dividends ( sum $ paid reg. to shareholders) - right to vote - risk/no guarantees - volatility/uncertainty - last claim to assets Preffered: - hybrid of stock & bond - common stock than can be purchased - less volativity, risk, growth - equity (how much put in & you'll get out ) in company - less volatile than common - less capital gain - no voting rights - callable ( companies could take and pay for) - greater claim to assets - tax. adv. for corporation

Entrepreneurial effort within a larger organization is referred to as​ _____. A. high-growth venture B.crowdfunding C. angel investing D. intrapreneurship E. entrepreneurial spirit

D

Similar to​ stocks, which of these are traded on public​ exchanges? A.Treasury notes B.Treasury bonds C.Municipal bonds D.ETFs E.Treasury bills

D

Which of the following are used to lower a​ financier's exposure to credit​ risk? A. Derivatives B.Options C. Financial futures D. Credit derivatives E.Hedge funds

D

Which of the following represents the separate legal entity established by strategic​ partners? A. Acquisition B. Strategic alliance C.Consolidation D.Joint venture E.Leveraged buyout

D

Which of the following summarizes an anticipated company project along with its​ objectives, and strategies for accomplishing particular​ objectives? A. Business incubator B.Angel investing C. Initial public offering D.Business plan E.Advisory board

D

Which one of the following statements is accurate as regards functions of a​ corporation? A.Private corporations are also known as sole proprietorships. B.A corporation is owned by two or more partners. C.The stock of a private corporation is sold to anyone who has the means to buy it. D.Public corporations are said to be publicly held or publicly traded. E.The stock of a public corporation is sold to founding partners only.

D

_________ refers to the growth in the value of the stock price over time. A.Hedging B. A dividend C.Derivatives D.Capital gain E.Par value

D

All of the following are advantages of partnership EXCEPT​ _____. A.forming a partnership is almost as simple as establishing a sole proprietorship B.by forming a​ partnership, there is an opportunity to share costs C.income tax is straightforward for partnerships D.by forming a​ partnership, there are increased chances of longevity of business E.high liquidity results in longevity

E

Bob and Rob have started a food delivery business together called Grub Galore in their college town. They have not incorporated their business and they run it from​ Bob's basement and garage. Grub Galore is an example of which form of business​ ownership? A.Corporation B.Master limited partnership C.Sole proprietorship D.Limited liability company E.Partnership

E

In​ a(n) ________, the purchaser tries to persuade enough shareholders to go against management and vote to sell. A.joint venture B.acquisition C.leveraged buyout D.merger E.hostile takeover

E

The interest income a buyer receives from the bond is called the​ ______. A.intrinsic value B.par value C.dividend D.duration rate E. yield

E

Which group was created by the SBA to make smaller investments and consider businesses others might not want to finance by offering​ loans, venture​ capital, and management​ assistance? A.Microlenders B.Kickstarter C.Crowdfunder D.Venture capitalist E.Small Business Investment Companies​ (SBICs)

E

Which term defines a company seeking capital from the community for various business​ ventures, investments, or​ loans? A. Franchising B.Initial public offering C.Microlending D.Angel investing E.Crowdfunding

E

general obligation bonds vs. revenue bonds

GOs - bond issuers can make interest & bond payments w/ any revenue source (tax revenue fees) - relatively safe Revenue - backed by revenue generated by the specific project financing the bond - ex. hospitals, airports, tolls - higher risks & yields

Joint ventures vs. strategic alliances

JV - 2 companies invest in a separate company SA - formal relationship b/t 2+ companies for a common goal while remaining organizaitons

business incubators

facilities that hold small businesses & provide support services during their early growth process

franchise, franchisee, franchisor

franchise - business arrangement where 1 company obtains the rights to sell the products & brand of anther company franchisor - compnay that licenses elements of its business to other companies franchisee - business owner who pays for the rights to sell products & brand of the franchisor

goal vs. objectives

goals - broad long-range target or aim objectives - specific, short-range target or aim + boosts motivation + sets standards + clarifies expectations + guides activity

hedging vs. speculating

hedging - investment technique designed to offset a potential loss on one investment by purchasing a second investment that you expect to perform in the opposite way speculating - trading a financial instrument involving high risk, in expectation of significant returns. The motive is to take maximum advantage from fluctuations in the market.

stock exchange - NYSE vs. NASDAQ

mkt where securities are bought & sold NYSE - larger mkt cap - in person NASDAQ - online - big companies (google, fb) - potentially more volatile

portfolio asset allocation

need $ to live off of for a month - cash - income: real estate, bonds, etc. - equity: liquidity

microlenders

organizations, gen. nonprofit, that lend smaller amts. of $ to owners who don't qualify for conventional bank loans

qualitative vs. quantitative forecasts

qualitative - intuitive judgements - consumer research - feelings/thoughts not # quantitative - historical data - statistical computations - ###

stop order

sell if price drops

SBA

small business administration - protects the interests of small businesses and ensures that they receive a fair share of government contracts

short selling (steps)

trade on declining price 1. borrow stock 2. sell it 3. broker calls the stock 4. buyt it back, hoping it is now lower than sold it for to make a profit