BCOR 340 Chpt.1

Which one of the following functions should be assigned to the corporate treasurer rather than to the controller?

Cash management

Which one of the following occupations best fits into the corporate area of finance?

Chief financial officer

Which one of the following statements about a limited partnership is correct?

There must be at least one general partner.

The shareholders of Weil's Markets would benefit if the firm were to be acquired by Better Foods. However, Weil's board of directors rejects the acquisition offer. This is an example of:

an agency conflict.

Security dealers:

buy and sell from their own inventory.

One example of a primary market transaction would be the:

sale of 1,000 shares of newly issued stock by Alt Company to Miquel.

You contacted your stock broker this morning and placed an order to sell 300 shares of a stock that trades on the NYSE. This sale will occur in the:

secondary market.

Which one of the following parties can sell shares of ABC stock in the primary market?

ABC company

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Agency

Which one of the following situations is most apt to create an agency conflict?

Basing management bonuses on the length of employment

The primary goal of financial management is to maximize:

the market value of existing stock.

In a general partnership, each partner is personally liable for:

the total debts of the partnership, even if he or she was unaware of those debts.

A corporation:

is a legal entity separate from its owners.

The Sarbanes-Oxley Act in 2002 was primarily prompted by which one of the following from the 1990s?

Corporate accounting and financial fraud

Which one of the following is a capital structure decision?

Establishing the preferred debt-equity level

Which one of the following is a working capital decision?

How much cash should the firm keep in reserve?

Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?

Increase the protections against corporate fraud

Which one of the following statements is correct?

NASDAQ has more listed stocks than does the NYSE.

Capital budgeting includes the evaluation of which of the following?

Size, timing, and risk of future cash flows

Margie opened a used bookstore and is both the 100 percent owner and the store's manager. Which type of business entity does Margie own if she is personally liable for all the store's debts?

Sole proprietorship

Which one of the following correctly defines a common chain of command within a corporation?

The controller reports directly to the chief financial officer.

Which one of the following statements is correct?

The primary purpose of the NYSE is to match buyers with sellers.

One advantage of the corporate form of organization is the:

ability to raise larger sums of equity capital than other organizational forms.

The goal of financial management is to increase the:

current market value per share.

The Sarbanes-Oxley Act of 2002 has:

essentially made officers of publicly traded firms personally responsible for the firm's financial statements.

An auction market:

has a physical trading floor.

A sole proprietorship:

has its profits taxed as personal income.

Corporate shareholders:

have the ability to change the corporation's bylaws.

The primary goal of financial management is most associated with increasing the:

market value of the firm.

Limited liability companies are primarily designed to:

provide limited liability while avoiding double taxation.