Financial Management Chapter 1

Which one of the following grants an individual the right to vote on behalf of a shareholder? Proxy Bylaws Indenture agreement Stock option Stock audit

Proxy

Public offerings of debt and equity must be registered with the: New York Board of Governors. Federal Reserve. NYSE Registration Office. Securities and Exchange Commission. Market Dealers Exchange.

Securities and Exchange Commission.

Ultimately, the ______ control(s) the corporation. chair of the board members of the board of directors chief executive officer chief operating officer shareholders

shareholders

Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management? An increase in the amount of the quarterly dividend A decrease in the per unit production costs An increase in the number of shares outstanding A decrease in the net working capital An increase in the market value per share

An increase in the market value per share

Which form of business would be the best choice if it were necessary to raise large amounts of capital? Sole proprietorship Limited liability company Corporation General partnership Limited partnership

Corporation

Which one of the following questions is a working capital management decision? Should the company issue new shares of stock or borrow money? Should the company refurbish its equipment or replace it? How much inventory should the company keep on hand? Should the company close one of its current stores? How much money should the company borrow to buy a new building?

How much inventory should the company keep on hand?

Shareholders can replace company management by implementing: stock options. promotions. the Sarbanes-Oxley Act. an agency play. a proxy fight.

a proxy fight.

Deciding which long-term investment a firm should make is a ______ decision. working capital management capital constraints cost of capital capital budgeting capital structure

capital budgeting

Determining the number of shares of stock to issue is an example of a ______ decision. capital rationing net working capital capital budgeting capital allocation capital structure

capital structue

A firm's mixture of debt and equity financing is the result of its ______ decisions. working capital management cash management cost analysis capital budgeting capital structure

capital structure

The growth of both sole proprietorships and partnerships is frequently limited by the firm's: double taxation. bylaws. inability to raise cash. limited liability. agency problems.

inability to raise cash.

Decisions made by financial managers should primarily focus on increasing the: size of the firm. growth rate of the firm. gross profit per unit produced. market value per share of outstanding stock. total sales.

market value per share of outstanding stock.

A firm's ______ is the firm's mix of short-term assets and short-term liabilities. net working capital net debt investment capital net currency capital structure

net working capital