FINA 3724 Chapter 1

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

Agency

Which one of the following statements is correct?

All over-the-counter sales occur in dealer markets.

The Sarbanes-Oxley Act in 2002 was primarily prompted by which one of the following from the 1990s?

Corporate accounting and financial fraud

One advantage of the corporate form of organization is the:

ability to raise larger sums of equity capital than other organizational forms.

Jenna has been promoted and is now in charge of all external financing. In other words, she is in charge of:

capital structure management.

An auction market:

has a physical trading floor.

One example of a primary market transaction would be the:

sale of 1,000 shares of newly issued stock by Alt Company to Miquel.

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.

Theo's BBQ has $48,000 in current assets and $39,000 in current liabilities. Decisions related to these accounts are referred to as:

working capital management.