Question 1

Which of the following would be paid first?

Accepted Answer

A)  Dividends paid on common stock 
B)  Dividends paid on preferred stock 
C)  Interest on corporate bonds 
D)  Bonuses paid to stockholders 
E)  Contributions to retained earnings 
A)  Dividends paid on common stock 
B)  Dividends paid on preferred stock 
C)  Interest on corporate bonds 
D)  Bonuses paid to stockholders 
E)  Contributions to retained earnings C

Question 2

A budget is a financial statement that projects income and/or expenditures over a specified future period.

Accepted Answer

A) True 
 B)False  True

Question 3

Speculative production is an example of a long-term financial need.

Accepted Answer

A) True 
 B)False  False

Question 4

Typically, long-term loans are normally repaid in three to seven years.

Accepted Answer

A) True 
 B)False

Question 5

The prime interest rate is the

Accepted Answer

A)  highest rate charged by a commercial bank. 
B)  average rate charged by a commercial bank. 
C)  lowest rate charged by a commercial bank. 
D)  rate charged by the Federal Reserve Bank for business loans. 
E)  rate charged by the SEC for business loans. 
A)  highest rate charged by a commercial bank. 
B)  average rate charged by a commercial bank. 
C)  lowest rate charged by a commercial bank. 
D)  rate charged by the Federal Reserve Bank for business loans. 
E)  rate charged by the SEC for business loans.

Question 6

When compared to other forms of short-term financing, factoring is relatively inexpensive.

Accepted Answer

A) True 
 B)False

Question 7

Debt capital is money obtained from the sale of shares of ownership in a business.

Accepted Answer

A) True 
 B)False

Question 8

A __________ is a bond backed only by the reputation of the issuing corporation.

Accepted Answer

A)  registered bond 
B)  convertible bond 
C)  mortgage bond 
D)  debenture bond 
E)  serial bond 
A)  registered bond 
B)  convertible bond 
C)  mortgage bond 
D)  debenture bond 
E)  serial bond

Question 9

The use of borrowed funds to increase the return on owners' equity is

Accepted Answer

A)  equity capital. 
B)  Fed financing. 
C)  common stock financing. 
D)  financial suicide. 
E)  financial leverage. 
A)  equity capital. 
B)  Fed financing. 
C)  common stock financing. 
D)  financial suicide. 
E)  financial leverage.

Question 10

Debt capital is financing provided by the owner or owners of the business.

Accepted Answer

A) True 
 B)False

Question 11

Financial planning begins with establishing a set of valid goals and objectives.

Accepted Answer

A) True 
 B)False

Question 12

A __________ budget estimates a firm's expenditures for major assets.

Accepted Answer

A)  cash 
B)  capital 
C)  long-term needs 
D)  traditional 
E)  zero-base 
A)  cash 
B)  capital 
C)  long-term needs 
D)  traditional 
E)  zero-base

Question 13

Commercial paper is a short-term promissory note issued by a small business.

Accepted Answer

A) True 
 B)False

Question 14

Trade credit is the least popular form of short-term financing.

Accepted Answer

A) True 
 B)False

Question 15

Selling stock

Accepted Answer

A)  is a form of financing that must be repaid at maturity. 
B)  requires the payment of interest every three months. 
C)  is a form of equity financing. 
D)  is a form of debt financing. 
E)  is a form of financing that has low flotation costs. 
A)  is a form of financing that must be repaid at maturity. 
B)  requires the payment of interest every three months. 
C)  is a form of equity financing. 
D)  is a form of debt financing. 
E)  is a form of financing that has low flotation costs.

Question 16

Which of the following would be allowed to elect a corporation's board of directors?

Accepted Answer

A)  Corporate management 
B)  Common stockholders 
C)  Corporate bondholders 
D)  Long-term lenders 
E)  Suppliers 
A)  Corporate management 
B)  Common stockholders 
C)  Corporate bondholders 
D)  Long-term lenders 
E)  Suppliers

Question 17

The most popular and inexpensive form of short-term financing is

Accepted Answer

A)  factoring. 
B)  promissory notes. 
C)  commercial paper. 
D)  unsecured bank notes. 
E)  trade credit. 
A)  factoring. 
B)  promissory notes. 
C)  commercial paper. 
D)  unsecured bank notes. 
E)  trade credit.

Question 18

An IPO occurs when a corporation sells common stock to the general public for the first time.

Accepted Answer

A) True 
 B)False

Question 19

A budgeting approach in which every expense in every budget must be justified is referred to as __________ budgeting.

Accepted Answer

A)  zero-base 
B)  financial-based 
C)  traditional 
D)  TQM 
E)  efficient-market 
A)  zero-base 
B)  financial-based 
C)  traditional 
D)  TQM 
E)  efficient-market

Question 20

The most basic form of corporate ownership is

Accepted Answer

A)  long-term equity loans. 
B)  SEC-qualified stock. 
C)  preferred stock. 
D)  common stock. 
E)  corporate bonds. 
A)  long-term equity loans. 
B)  SEC-qualified stock. 
C)  preferred stock. 
D)  common stock. 
E)  corporate bonds.

Which of the following would be paid first?

A budget is a financial statement that projects income and/or expenditures over a specified future period.

Speculative production is an example of a long-term financial need.

Typically, long-term loans are normally repaid in three to seven years.

The prime interest rate is the

When compared to other forms of short-term financing, factoring is relatively inexpensive.

Debt capital is money obtained from the sale of shares of ownership in a business.

A __________ is a bond backed only by the reputation of the issuing corporation.

The use of borrowed funds to increase the return on owners' equity is

Debt capital is financing provided by the owner or owners of the business.

Financial planning begins with establishing a set of valid goals and objectives.

A __________ budget estimates a firm's expenditures for major assets.

Commercial paper is a short-term promissory note issued by a small business.

Trade credit is the least popular form of short-term financing.

Selling stock

Which of the following would be allowed to elect a corporation's board of directors?

The most popular and inexpensive form of short-term financing is

An IPO occurs when a corporation sells common stock to the general public for the first time.

A budgeting approach in which every expense in every budget must be justified is referred to as __________ budgeting.

The most basic form of corporate ownership is

Exploring the World of Business and Economics

Ethics and Social Responsibility in Business

Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Exploring Social Media and E-Business

Using Management and Accounting Information

Filters

Exam 16: Mastering Financial Management

Which of the following would be paid first?

A budget is a financial statement that projects income and/or expenditures over a specified future period.

Speculative production is an example of a long-term financial need.

Typically, long-term loans are normally repaid in three to seven years.

The prime interest rate is the

When compared to other forms of short-term financing, factoring is relatively inexpensive.

Debt capital is money obtained from the sale of shares of ownership in a business.

A __________ is a bond backed only by the reputation of the issuing corporation.

The use of borrowed funds to increase the return on owners' equity is

Debt capital is financing provided by the owner or owners of the business.

Financial planning begins with establishing a set of valid goals and objectives.

A __________ budget estimates a firm's expenditures for major assets.

Commercial paper is a short-term promissory note issued by a small business.

Trade credit is the least popular form of short-term financing.

Selling stock

Which of the following would be allowed to elect a corporation's board of directors?

The most popular and inexpensive form of short-term financing is

An IPO occurs when a corporation sells common stock to the general public for the first time.

A budgeting approach in which every expense in every budget must be justified is referred to as __________ budgeting.

The most basic form of corporate ownership is

Exploring the World of Business and Economics

Ethics and Social Responsibility in Business

Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Exploring Social Media and E-Business

Using Management and Accounting Information

Filters