Exam 6: Firms, the Stock Market, and Corporate Governance

Mortgages issued to borrowers whose credit histories include failures to make payments on bills are known as ________ mortgages.

What do economists call the situation where a hired manager does not have the same interests as the owners of the business?

What is a primary market?

How can a partnership raise funds needed for firm expansion?

What is a corporate bond and what does it specify?

How do firms raise external funds through indirect finance?

How does the owner of a sole proprietorship relate to the business?

In a corporation,what are "inside directors" and "outside directors"?

What are liabilities?

Explain what potential conflict exists between shareholders in a corporation and the corporation's managers.

Unlike firms that sell stock in financial markets,which are known as ________ firms,companies like Facebook which do not sell stock in financial markets are known as ________ firms.

An investor is more likely to buy a firm's stock if the firm's income statement shows ________ and if its balance sheet shows ________.

By tying the salaries of top corporate managers to the price of the corporation's stock,corporations hope to avoid

Corporate governance involves the way in which

The owners of a ________ have a separate legal distinction from the business.

What are the advantages of setting up a corporation as opposed to a proprietorship or partnership?

When Internet coupon site Groupon sold stock to the public for the first time following its IPO in November 2011,it did so through the NASDAQ market.This was an example of Groupon raising funds through

Briefly describe the Sarbanes-Oxley Act and explain why it was passed.

The person hired by a corporation's board of directors to run the day-to-day operations of the corporation is known as the

What is the difference between retained earnings and dividends?