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Theory

Brigham Succinct 4th Copy Chapter 1: An Overview of economic Management 1 . Which in the following will be among the three main regions of finance? a. financial institutions m.

investments c. financial management d. each of the above happen to be correct elizabeth. probably none with the above happen to be correct m. Correct. 2 . The globalization of organization and the elevated use of technology are the two key developments in financial supervision today. a. True w. False a. True a few. Which with the following may explain how come a business might choose to organize as a corporation rather than as a sole proprietorship or a collaboration? a. Organizations generally confront fewer polices.. Corporations generally face reduce taxes. c. Corporations generally find it better to raise capital. d. Organizations enjoy unlimited liability. at the. All of the over statements are correct. c. Correct. 5. A collaboration is controlled by the same taxation as businesses. a. True b. Bogus b. False 5. 1 main pitfall with partnerships may be the requirement of a charter make of bylaws. a. True b. Bogus b. Phony 6. One disadvantage of the sole proprietorship type of organization is that there is: a. unlimited the liability. b. double taxation c. more restrictions than to get corporations d. easy transferability of control interest. all the above are correct. a. Correct 7. A corporate charter should include which of the pursuing: a. term of the suggested corporation w. type of actions it will go after c. sum of capital stock m. number of administrators e. titles and addresses of administrators f. all of the above farreneheit. Correct. eight. One reason that the value of most businesses is strengthened if they are structured as a firm is that: a. corporations face unlimited the liability. b. it really is easier to copy ownership of the corporation (corporations are more the liquid assets). c. corporations include a more hard time raising capital than only proprietorships. d.

All of the above b. Right 9. Which in turn of the subsequent represents a tremendous disadvantage towards the corporate form of organization? a. Difficulty in shifting ownership. n. Exposure to taxation of company earnings and stockholder gross income. c. Degree of liability to which company owners and managers will be exposed. g. Difficulty organizations face in obtaining large amounts of capital in financial marketplaces. b. Accurate 10. The primary financial police officer (CFO) is usually the highest position officer in a corporation. a. True n. False w. False eleven. The activities with the financial personnel include: a. forecasting and planning. b. ajor expense and loans decisions. c. dealing with monetary markets. d. risk management. elizabeth. all of the previously mentioned. e. Accurate. 12. The financial vice-president’s key subordinates are the leader and the ceo. a. Accurate. b. Fake b. FAlse. 13. For most firms the treasurer has the responsibility intended for managing the firm’s funds and valuable securities, to get planning it is capital structure, for offering stocks and bonds to raise capital, intended for overseeing the organization pension prepare, and for managing risk. a. True m. False a. True 18. The primary target of a publicly-owned firm enthusiastic about serving the stockholders ought to be to: a.

Take full advantage of expected total corporate profit. b. Maximize expected EPS. c. Decrease the chances of loss. d. Improve the share price per share. electronic. Maximize expected net income. g. Correct 12-15. Managers that depart from the goal of shareholder riches maximization run the risk of being taken from their jobs. a. Authentic b. Phony a. Authentic. 16. The majority of actions that help a good increase the cost of its stock also benefit culture at large. a. True w. False a. True. seventeen. The primary contribution of fund to total cultural welfare is its: a. Function as a fruitful resource. n. Contribution to the efficient allocation and utilization of resources. c.

Role because an exogenous variable. g. Positive impact around the externalities of “other variables.  e. Contribution to environmental safety. b. Correct 18. The majority of firms today have set up strong unique codes of ethical behavior, yet there are no obvious answers for many in the ethical questions facing many businesses. a. True b. Bogus a. The case. 19. Socially responsible actions that maximize costs might have to be put over a mandatory basis. a. The case b. False a. True. 20. An agency relationship comes up whenever more than one individuals retain the services of another person or firm to perform a few service and delegate decision-making authority to this agent.. Authentic b. Phony. a. True. 21. Monetary management the main agency relationships are these between: a. stockholders and managers n. managers and debtholders c. managers with similar degrees of authority within the firm g. a and b electronic. a, n, and c d. Appropriate 22. Which usually of the pursuing work to minimize agency disputes between stockholders and bondholders? a. Which includes restrictive covenants in the industry’s bond agreement. b. Providing managers using a large number of commodity. c. The passage of laws that make it easier for companies to resist aggressive takeovers. deb.

All of the assertions above will be correct. a. Correct 23. Which from the following actions are likely to lessen agency issues between stockholders and managers? a. Spending managers a huge fixed wage. b. Elevating the danger of business takeover. c. Placing restrictive covenants indebted agreements. m. All of the assertions above happen to be correct. w. Correct twenty four. The managers should always undertake actions that result in a copy of riches from bondholders to stockholders. a. Accurate b. False b. Phony. 25. Which usually of the next factors are likely to encourage administration to follow stock value maximization as being a goal?. Investors link management’s compensation to company functionality. b. Managers’ reactions to the threat of firing and hostile takeovers. c. Statements a and b are both correct. c. Correct. 21. Mechanisms utilized to motivate managers to act in shareholders’ best interests include: a. managerial compensation b. direct intervention by shareholders c. the menace of firing d. the threat of takeovers elizabeth. all of the over e. Correct. 27. Lenders lend cash at rates that are based upon: a. riskiness of the business existing resources b. expectations concerning the riskiness of upcoming asset upgrades c. this individual firm’s existing capital structure d. targets concerning foreseeable future capital framework decisions elizabeth. all of the over e. Right. 28. The dividend insurance plan decision is a way the firm is funded (e. g., the mix of personal debt and collateral used). a. True Wrong. The dividend policy decision is the selection of how much of earnings to spend as payouts and how very much to retain to reinvest in the firm. m. False m. False. up to 29. Managerial actions are the only determinant of any firm’s inventory value. a. True False. b. Fake. 30. In the event the firm boosts EPS, it can maximize stockholder wealth. a. True n. False w. False.