BADM 363 Chapter 1

What is the main goal of financial management?

To maximize current share value.

True or false: In a large corporation, stockholders and managers are usually separate groups.

True

The conflict of interest between an agent and a principal is called a(n) ________________.

agency problem

An organization must prepare ________________ and bylaws when forming a corporation.

articles of incorporation

The controller is responsible for which of the following tasks?

-Financial accounting -Tax reporting and payments

Which of the following are included in a firm's capital structure?

-Long-term debt -Equity

Which of the following are defining features of the primary market?

-Proceeds from the sale of securities goes to the issuing firm -It is the market where initial public offerings are made

Which of the following are auction markets in the U.S.?

-The Chicago Stock Exchange -The New York Stock Exchange

A corporation receives cash from financial markets by selling _______________ and _______________.

-bonds -stocks

A treasurer's responsibilities typically include:

-handling cash flows. -managing capital expenditure decisions. -making financial plans.

In large firms, financial activity is usually associated with which top officer?

Chief financial officer

According to the textbook, which of the following is not one of the three main questions to be addressed if you want to start your own business?

How many employees will I need?