FIN 325 Corporate Finance
An increase in which one of the following will increase operating cash flow for a profitable, tax-paying firm?
Depreciation
Working capital management includes which one of the following?
Determining which customers will be granted credit
Probably the least effective means of aligning management goals with shareholder interests is:
automatically increasing management salaries on an annual basis.
Highly liquid assets:
can be sold quickly at close to full value.
Firms that compile financial statements according to GAAP:
can still manipulate their earnings to some degree.
Cash flow to stockholders is defined as:
dividends paid minus net new equity raised
Financial leverage:
increases the potential return to the stockholders.
Cash flow to creditors increases when:
long-term debt is repaid.
A limited liability company (LLC):
prefers its profits be taxed as personal income to its owners.
Market values:
reflect expected selling prices given the current economic situation.
Net income increases when:
revenue increases.
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.
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 occupations best fits into the corporate area of finance?
Chief financial officer
Deandre and Mason both enjoy sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Deandre and Mason will equally share in the decision making and in the business profits or losses. Which type of business did they create if they both have full personal liability for the firm's debts?
General partnership
Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?
Increase the protections against corporate fraud Correct
Silvia is employed as a currency trader in the Japanese yen market. Her job falls into which one of the following areas of finance?
International Finance
If you accept a job as a domestic security analyst for a brokerage firm, you are most likely working in which one of the following financial areas?
Investments
Which one of the following statements is correct? - Nasdaq has more listed stocks than does the NYSE. - The NYSE is a dealer market. - Nasdaq is an auction market. - Nasdaq has the most stringent listing requirements of any U.S. exchange. - The trading floor for Nasdaq is located in Chicago.
Nasdaq has more listed stocks than does the NYSE.
Which one of the following statements is correct? - All of the major stock exchanges are U.S. based. - The NYSE was created by the National Association of Securities Dealers in the early 1930s. - The Chicago Stock Exchange is a dealer market. - OTC markets have a physical trading floor generally located in either New York City or Chicago. - The primary purpose of the NYSE is to match buyers with sellers.
The primary purpose of the NYSE is to match buyers with sellers.
Production equipment is classified as:
a tangible fixed asset.
One advantage of the corporate form of organization is the:
ability to raise larger sums of equity capital than other organizational forms.
The shareholders of Qiang'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.
The market value of:
an asset tends to provide a better guide to the actual worth of that asset than does the book value.
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.
An agency issue is most apt to develop when:
the control of a firm is separated from the firm's ownership.
The primary goal of financial management is to maximize:
the market value of existing stock.
