Mid-Term Financial Institution

Since ________ and ownership are separated, a corporation's life is unlimited.

management

Which of the following positions generally report to the chief financial officer (CFO)? Multiple select question. Director of marketing Reason: Marketing is not a financing activity. Both the controller and the treasurer report to the CFO. Chief executive officer (CEO) Reason: The CFO reports to the CEO. Both the treasurer and the controller report to the CFO. Controller Treasurer

Controller Treasurer

Business finance is broadly concerned with which of the following (select all that apply)? Multiple select question. How to manage day-to-day finances of the firm How to finance long-term investments Which long-term investment to make How to set up the audit committee

How to manage day-to-day finances of the firm How to finance long-term investments Which long-term investment to make

The goal of the financial management is to increase the value of _____.

the existing shares of stock

Is profit maximization the primary objective of a business?

No; profit maximization may not take into account other strategic objectives necessary to maximize shareholder value.

Which of the following is NOT one of the basic areas of finance? Multiple choice question. Personal finance Corporate finance Financial institutions Investments International finance

Personal finance

Which of these topics is not of especial interest to a financial manager? Multiple choice question. Product development Capital structure Reason: Capital structure is a topic of key importance to a financial manager, per the text. Working capital management Reason: Working capital management is a topic of key importance to a financial manager, per the text. Capital budgeting Reason: Capital budgeting is a topic of key importance to a financial manager, per the text.

Product development

What is the main goal of financial management?

To maximize current share value

Which of the following companies were involved in corporate scandals that led to Sarbanes-Oxley? Multiple select question. WorldCom Enron Tyco Disney

WorldCom Enron Tyco

The Sarbanes-Oxley Act is intended to strengthen protection against: Multiple choice question.

corporate accounting fraud and financial malpractice

Public limited companies and joint stock companies are other names for

corporations

A good financial decision will do which of the following?

Increase market value of shareholders' equity Reason: A good financial decision will increase market value of shareholders' equity and the value of the firm's shares. Increase the value of the firm's existing stock Reason: A good financial decision will increase market value of shareholders' equity and the value of the firm's shares.

A bad financial decision is defined as a decision that ______ shareholder wealth. increases decreases maximizes

decreases

"Increasing shareholder wealth" means increasing the _________. Multiple choice question. market value of liabilities current bond value current common stock value book value of liabilities

current common stock value

True or False: "Profit maximization" is the goal for the management of a corporation in short-run only. True false question.

Reason: "Profit maximization" is too imprecise. Maximizing short-run profit will not increase value for stakeholders. False