Finance Ch.1

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stakeholder

A ______ is someone other than an owner or a creditor who potentially has a claim of the cash flows of a firm.

Transparency

A benefit corporation is for profit, and has the legal attributes of accountability, _____, and purpose.

Sole proprietorship

A business owned by one person

partnership

A business without separate legal authority formed by two or more people is known as a _____.

Corportation

A legal entity separate from the owners, yet treated as a legal person and Is the most important form, in terms of size, of business organization in the United States

articles of incorporation

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

Long-term investments

Capital budgeting is concerned with planning and managing a firm's _____.

Managers

In a shareholder-manager relationship, who is the agent?

Organized auction markets

Most equity shares of large firms in the U.S. trade on:

Bylaws

Forming a corporation involves preparing articles of incorporation and a set of

Secondary ; Auction Market

Jessica sold Adam shares of corporation stock. The stock is listed on the NYSE. This trade occurred

The New York Stock Exchange (NYSE)

Organized auction markets include:

Dividends & Debt payments

Some of the cash flow generated by a firm goes back to the financial markets in the form of ______.

SOX

The aim of the act known as _____ is to protect investors form corporate abuse.

unlimited

The life of a corporation is ______.

Agency

The relationship between stockholders and management can best be described as a(n) ______ relationship.

Employees, suppliers, and governments

Who are considered stakeholders in a company?

corporation

Joint stock company is another name for what is referred to as a ____ in the USA.

Both general partners and sole proprietors

Personally responsible for 100% of the firms debts

false

True or false: Ownership in the corporate form is difficult to transfer.

Management

Since ownership in a corporation can be dispersed over a huge number of stockholders, it can be argued that ______ effectively controls the firm.

maximize

The goal of a for-profit business is to ______ existing owners' equity.

False

True or false: Finance is mainly important to study if you are planning a career in finance.

Enron Tyco WorldCom

Which of the following companies were involved in corporate scandals that led to Sarbanes-Oxley?

controller and treasurer

Which of the following positions generally report to the chief financial officer (CFO)?

Capital

______ budgeting is the process of making and managing expenditures on long-term assets.

Benefit

corporation is for profit, and has the legal attributes of accountability, transparency, and purpose.

Agency Problem

If you hire a real estate company to sell your house, you are most apt to encounter which one of the following?

board of directors

In a corporation, the stockholders elect _____, who then select the managers.

STEM

In addition to the importance of finance for marketing, accounting, and management careers, finance is also now considered a _____ discipline, especially at the graduate level.

Equity

In financial markets, debt and ___ securities are bought and sold.

CFO

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

Corporate

It is argued that, left to themselves, managers would tend to maximize the amount of resources over which they have control or, more generally, _____ power or wealth.

Processing cost reports

The controller, rather than the treasurer, is typically responsible for which function

The stock

The financial manager acts in the shareholders' best interests by making decisions that increase the value of _____.

corporate finance, investments, financial institutions, international finance, and Fintech

The five main areas of finance are

Investments

The five main areas of finance are corporate finance, _____, financial institutions, international finance, and fintech.

Owners Equity

The goal of the for-profit business is to maximize


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