FIN 5023

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

Capital structure

Which business form is best suited to raising large amounts of capital?

Corporation

Which of the following parties are considered stakeholders of a firm?

Employees and the government

Which one of the following questions is a working capital management decision?

How much inventory should be on hand for immediate sale?

Which one of the following questions is least likely to be addressed by financial managers?

How should a product be marketed?

Sally and Alicia are equal general partners in a business. They are content with their current management and tax situation but are uncomfortable with their unlimited liability. Which form of business entity should they consider as a replacement to their current arrangement assuming they wish to remain the only two owners of the business?

Limited liability company

Which one of the following best states the primary goal of financial management?

Maximize the current value per share

Which one of the following functions should be the responsibility of the controller rather than the treasurer?

Processing cost reports

Which one of the following is a means by which shareholders can replace company management?

Proxy fight

Which one of the following is a primary market transaction?

Sale of a new share of stock to an individual investor

Public offerings of debt and equity must be registered with the:

Securities and Exchange Commission.

Which one of the following statements concerning a sole proprietorship is correct?

The life of a sole proprietorship is limited.

Financial managers should strive to maximize the current value per share of the existing stock to:

best represent the interests of the current shareholders.

A limited partnership:

has at least one partner who has unlimited liability for all of the partnership's debts.

A limited liability company:

is taxed similar to a partnership.

The Sarbanes-Oxley Act of 2002 is a governmental response to:

management greed and abuses

Decisions made by financial managers should primarily focus on increasing the:

market value per share of outstanding stock.

Corporate dividends are:

taxable income of the recipient even though that income was previously taxed.

The primary advantage of being a limited partner is:

the partner's maximum loss is limited to their capital investment

An example of a capital budgeting decision is deciding:

whether or not to purchase a new machine for the production line.