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