Fin 315 Chp 1
general partnership
two people go into an equally shared business
primary goal of financial management for a sole proprietorship
maximize the market value of the equity
Sarbanes-Oxley Act
require the corporate officers to personally attest that the financial statements are a fair representation of the company's financial results.
All over-the-counter sales occur in dealer markets
True
There must be at least one general partner
True
primary market
sale of newly issued stock by the company to such
cash management
should be assigned to the corporate treasurer rather than the controller
Being in charge of all external financing is being in charge of
capital structure management
Capital budgeting includes the evaluation of
size, timing, and risk of future cash flows
Advantage of the corporate form of organization is
the ability to raise larger sums of equity capital than other organizational forms
who can sell stock in the primary market?
the company
an agency issue is most apt to develop when
the control of a firm is separated from the firm's ownership
primary goal of financial management is to maximize
the market value of existing stock
The mixture of debt and equity is referred to as the firm's
capital structure
Sarbanes-Oxley act in 2002 was primarily prompted by which one of the following from the 1990s
Corporate accounting and financial fraud
Maria is the sole proprietor of an antique store that is located in a rented warehouse. The store has an outstanding loan with the local bank but no other debt obligations. There are no specific assets pledged as security for the loan. Due to a sudden and unexpected downturn in the economy, the store is unable to generate sufficient funds to pay the loan payments due to the bank. Which of the following options does the bank have to collect the money it is owed? I. Sell the inventory and apply the proceeds to the debt II. Sell the lighting fixtures from the building and apply the proceeds to the debt III. Withdraw funds from Maria's personal account at the bank to pay the store's debt IV. Sell any assets Maria personally owns and apply the proceeds to the store's debt
I, III, and IV only
Sole proprietorship:
Obtaining additional equity is dependent on the owner's personal finances.
corporate shareholders
ability to change corporation's bylaws
Security dealers
buy and sell from their own inventory
Function generally a responsibility to the corporate treasurer
capital expenditures