Finance 450 - Chapter 1 - Quiz 1

Stakeholders.

An employee has a claim on the cash flows of Martin's Machines. This claim is defined as a claim by one of the firm's:

Secondary market.

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:

Corporation

A legal entity separate from its owners.

Provide limited liability & avoid double taxation

Limited liability companies are primarily designed to:

Market value of existing stock.

The primary goal of financial management is to maximize:

Working capital management.

Theo's BBQ has $48,000 in current assets and $39,000 in current liabilities. Decisions related to these accounts as referred to as:

Automatically increasing management salaries on an annual basis.

Probably the least effective means of aligning management goals with shareholder interests is:

Increase the protections against corporate fraud.

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

The controller reports directly to the chief financial officer.

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

Limited partnership

Which one of the following forms of business organization offers liability protection to some of its owners but not to all of its owners?