Finance Ch.1
stakeholder
A ______ is someone other than an owner or a creditor who potentially has a claim of the cash flows of a firm.
Transparency
A benefit corporation is for profit, and has the legal attributes of accountability, _____, and purpose.
Sole proprietorship
A business owned by one person
partnership
A business without separate legal authority formed by two or more people is known as a _____.
Corportation
A legal entity separate from the owners, yet treated as a legal person and Is the most important form, in terms of size, of business organization in the United States
articles of incorporation
An organization must prepare ______ and bylaws when forming a corporation.
Long-term investments
Capital budgeting is concerned with planning and managing a firm's _____.
Managers
In a shareholder-manager relationship, who is the agent?
Organized auction markets
Most equity shares of large firms in the U.S. trade on:
Bylaws
Forming a corporation involves preparing articles of incorporation and a set of
Secondary ; Auction Market
Jessica sold Adam shares of corporation stock. The stock is listed on the NYSE. This trade occurred
The New York Stock Exchange (NYSE)
Organized auction markets include:
Dividends & Debt payments
Some of the cash flow generated by a firm goes back to the financial markets in the form of ______.
SOX
The aim of the act known as _____ is to protect investors form corporate abuse.
unlimited
The life of a corporation is ______.
Agency
The relationship between stockholders and management can best be described as a(n) ______ relationship.
Employees, suppliers, and governments
Who are considered stakeholders in a company?
corporation
Joint stock company is another name for what is referred to as a ____ in the USA.
Both general partners and sole proprietors
Personally responsible for 100% of the firms debts
false
True or false: Ownership in the corporate form is difficult to transfer.
Management
Since ownership in a corporation can be dispersed over a huge number of stockholders, it can be argued that ______ effectively controls the firm.
maximize
The goal of a for-profit business is to ______ existing owners' equity.
False
True or false: Finance is mainly important to study if you are planning a career in finance.
Enron Tyco WorldCom
Which of the following companies were involved in corporate scandals that led to Sarbanes-Oxley?
controller and treasurer
Which of the following positions generally report to the chief financial officer (CFO)?
Capital
______ budgeting is the process of making and managing expenditures on long-term assets.
Benefit
corporation is for profit, and has the legal attributes of accountability, transparency, and purpose.
Agency Problem
If you hire a real estate company to sell your house, you are most apt to encounter which one of the following?
board of directors
In a corporation, the stockholders elect _____, who then select the managers.
STEM
In addition to the importance of finance for marketing, accounting, and management careers, finance is also now considered a _____ discipline, especially at the graduate level.
Equity
In financial markets, debt and ___ securities are bought and sold.
CFO
In large firms, financial activity is usually associated with which top officer?
Corporate
It is argued that, left to themselves, managers would tend to maximize the amount of resources over which they have control or, more generally, _____ power or wealth.
Processing cost reports
The controller, rather than the treasurer, is typically responsible for which function
The stock
The financial manager acts in the shareholders' best interests by making decisions that increase the value of _____.
corporate finance, investments, financial institutions, international finance, and Fintech
The five main areas of finance are
Investments
The five main areas of finance are corporate finance, _____, financial institutions, international finance, and fintech.
Owners Equity
The goal of the for-profit business is to maximize