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- 1. Multiple Choice
Which of the following best describes the goal of the firm?
the maximization of the total market value of the firm's common stock
profit maximization
risk minimization
all of the above are equally important
- 2. Multiple Choice
Which of the following is an advantage of sole proprietorship?
limited liability for its owners
double taxation for its owners
no significant legal requirements for starting the business
easily transferred ownership
- 3. Multiple Choice
The true owners of the corporation are the:
holders of debt issues of the firm
preferred stockholders
board of directors of the firm
common stockholders
- 4. Multiple Choice
Money market instruments include
common stock
preferred stock
T-Bonds
T-Bills
- 5. Multiple Choice
An example of a primary market transaction is:
a new issue of common stock by AT&T
a sale of some outstanding common stock of AT&T by an investor
AT&T repurchasing its own stok from a stokholder
All of the above
- 6. Multiple Choice
Financial intermediaries:
offer indirect securities
include the national and regional stock exchange
usually are underwriting syndicate
constitute the various secondary markets
- 7. Multiple Choice
Profit maximization does not adequately describe the goal of the firm because:
profit maximization does not require the consideration of risk
profit maximization ignores the timing of a project's return
maximization of dividend payout ratio is a better description of the goal of the firm
a and b
- 8. Multiple Choice
One problem with maximization of shareholder wealth as a goal is that it ignores risk taken by the firm's financial managers.
True
False
- 9. Multiple Choice
The following are the function of Financial Managers except
to determine the customers' needs
to allocate the resources of find
to find the best sources of finance
to manage the cash efficiently
- 10. Multiple Choice
The goal of the firm should be:
maximization of profits
maximization of shareholder wealth
maximization of market share
maximization of sales
- 11. Multiple ChoiceWhat the Finance Department not do?Forecasting cash flow.Producing accounting information for managers.Hold Annual General Meetings.Take important decisions of finance.
- 12. Multiple Choice
This is are markets where transactions involving long-term debt or those maturing in more than a year is called _________.
capital markets
money markets
public market
product marketing
- 13. Multiple Choice
_______________ is responsible in presenting or requesting budget for advertisement and promotion of products.
advertising manager
marketing officer
finance officer
accounting supervisor
- 14. Multiple Choice
Which one can transfer their shares of ownership to other individuals without having to legally reorganize the company?
General partnerships
Sole proprietorships
Corporations
- 15. Multiple Choice
Finance functions are...
Planning for funds
Raising funds
Allocation of funds
All the above
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