Finance Quiz One

Corporation

A business that is a legal entity separate from the owners, yet treated as a legal person, is called a(n):

market value per share of outstanding stock.

Decisions made by financial managers should primarily focus on increasing the:

inability to raise cash.

The growth of both sole proprietorships and partnerships is frequently limited by the firm's:

Maximize the current value per share

Which one of the following best states the primary goal of financial management?

must distribute 25 percent of the profits to each partner.

A partnership with four general partners:

Taxable income earned by a partnership is treated as individual income.

Which one of the following statements is correct?

is personally responsible for 100 percent of the debts of the partnership.

A general partner:

requires the owner to be personally responsible for all of the company's debts.

A sole proprietorship:

Payment of loan interest

Which one of the following is a cash flow from a corporation into the financial markets?

General Partnership

A firm owned by two or more people who each have unlimited liability for all of the firm's debts is called a:

occurred in the secondary market.

Eduardo sold 500 shares of Northcutt Corporation stock on the New York Stock Exchange. This transaction:

best represent the interests of the current owners of the firm.

Financial managers should strive to maximize the current value per share of the existing stock to:

Secondary, auction market

Symone sold shares of Naraghi Corporation stock to Aleena. The stock is listed on the NYSE. This trade occurred in which one of the following?

Managers

The Sarbanes-Oxley Act of 2002 holds a public company's ______ responsible for the accuracy of the company's financial statements.

Shareholders

Ultimately, the ______ control(s) the corporation.

Sole Proprietorship

A firm owned by a single person who has unlimited liability for the firm's debt is called a:

Limited Partner

A partner in a firm knows that the maximum financial loss he or she will experience is the amount he or she invested in the firm. The partner is called a ______ partner.

Limited partnership

Abigail, Blake and Camila plan to launch a business. Abigail will fund the venture but wants to limit her liability to her initial investment. She has no interest in the daily operations. Blake will contribute his full efforts on a daily basis but has limited funds to invest in the business. Camila will be involved as a consultant and manager and will also contribute funds. Blake and Camila are willing to accept liability for the firm's debts as they feel they have nothing to lose by doing so. All three individuals will share in the firm's profits and wish to minimize the initial costs of organizing the business. Which form of business entity should these individuals adopt?

Vice President of Finance

Usually, the treasurer of a corporation reports directly to the:

Increasing current profits when doing so lowers the value of the company's equity

Which one of the following actions by a financial manager is most apt to create an agency problem?

What is the maximum level of cash to be kept in the firm's bank account?

Which one of the following involves a working capital management decision?

Sale of a new share of stock from a corporation to an individual investor

Which one of the following is a primary market transaction?

Corporations delisting from major exchanges

Which one of the following is an unintended result of the Sarbanes-Oxley Act?

The listing requirements for the NYSE are more stringent than those of Nasdaq.

Which one of the following statements is correct concerning the NYSE?

Both general partners and sole proprietors

______ are personally responsible for 100 percent of the firm's debts.