Finance 2000 chapter 1 questions
If you hire a real estate company to sell your house, you are most apt to encounter which one of the following?
Agency Problem
In financial markets, debt and securities are bought and sold.
Equity
Joint stock company is another name for what is referred to as a in the United States.
Corperations
Corporations in other countries are often called:
Pub limited, joint
A benefit corporation is for profit, and has the legal attributes of accountability, _____, and purpose.
transparency
A benefit corporation is for profit, and has the legal attributes of accountability, _____, and purpose. Multiple choice question.
transparency
Fill in the blank question. The five main areas of finance are corporate finance, investments, financial institutions, international finance, and
Partnership
A sole proprietor has ______ personal liability for all business debts and obligations.
Unlimited
Which of the following, according to the textbook, are possible financial goals for a company?
-survival-minimize costs-maximize profits
A ________ corporation is for profit, and has the legal attributes of accountability, transparency, and purpose.
Benefit
A_______corporation is for profit, and has the legal attributes of accountability, transparency, and purpose.
Benefit
A _______corporation is for profit, and has the legal attributes of accountability, transparency, and purpose
Benifit
______ budgeting is the process of making and managing expenditures on long-term assets.
Capital
What are the two factors that impact whether managers will act in the best interest of stockholders?
How closely management goals align with stockholder goals and the way managers are compensated
What is the main goal of financial management?
To maximize current value per share of existing stock
Which of the following positions generally report to the chief financial officer (CFO)?
Treasurer and Controller
A partnership must have at least _______ owners.
Two
The possible goal of profit maximization_________
can be achieved by cost-cutting, would probably be the most commonly sighted goal for a business
True or false: Finance is mainly important to study if you are planning a career in finance.
false
Capital budgeting is concerned with planning and managing a firm's _____.
long-term investments
Most equity shares of large firms in the U.S. trade on:
organized auction markets
The goal of the for-profit business is to maximize _________equity.
owners
Which of the following are considered stakeholders in a company?
Government Suppliers Employees
The five main areas of finance are corporate finance, _____, financial institutions, international finance, and fintech.
Investments
It is sometimes argued that, left to themselves, managers tend to minimize the amount of resources over which they have control.
false
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.
Corporate
Which of the following companies were involved in corporate scandals that led to Sarbanes-Oxley?
Enron, WorldCom, and Tyco
It is sometimes argued that, left to themselves, managers tend to minimize the amount of resources over which they have control.
False
The five main areas of finance are corporate finance, investments, financial institutions, international finance, and___________
Fintech
Which of the following are among the most important questions to be asked when a business is started?
How will everyday financial activities be handled? Where will long-term financing be obtained to pay for investments? What long-term investments should be made?
Which of the following are true of a sole proprietorship?
It is the simplest type of business to form. A proprietorship has a limited life.
A corporation is a distinct ______ entity and as such can have a name and take advantage of the legal powers of natural persons.
Legal
Because ownership in a corporate is spread over a huge number of shareholders, it can be argued that ________effectively controls the firm.
Management
Which of the following can be used to encourage managers to act in the best interests of shareholders?
Managerial compensation tied to performance, Better prospects of promotion
In a shareholder-manager relationship, who is the agent?
Managers
Since ownership in a corporation can be dispersed over a huge number of stockholders, it can be argued that ______ effectively controls the firm.
Managment
The goal of a for-profit business is to ______ existing owners' equity.
Maximize
Organized auction markets include:
New York Stock Exchange
A business without separate legal authority formed by two or more people is known as a _____.
Partnership
The aim of the act known as _____ is to protect investors form corporate abuse.
SOX
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.
STEM
A ______ is someone other than an owner or a creditor who potentially has a claim of the cash flows of a firm.
Stakeholder
The financial manager acts in the shareholders' best interests by making decisions that increase the value of _____.
The Stock
When a corporation is formed, it is granted which of the following rights?
The ability to issue stock, Legal powers to sue, State citizenship for jurisdictional purposes
Which of the following is not an important question that must be asked when starting a firm?
Which type of operating system should you use for your computers?
In large firms, financial activity is usually associated with which top officer?
chief financial officer
Some of the cash flow generated by a firm goes back to the financial markets in the form of ______.
dividends and debt payments
