Question 1

A conflict of interest between the stockholders and management of a firm is called:

Accepted Answer

A)  stockholders' liability. 
B)  corporate breakdown. 
C)  the agency problem. 
D)  corporate activism. 
E)  legal liability. 
A)  stockholders' liability. 
B)  corporate breakdown. 
C)  the agency problem. 
D)  corporate activism. 
E)  legal liability.

Question 2

Which one of the following statements is correct concerning the organizational structure of a corporation?

Accepted Answer

A)  The vice president of finance reports to the chairman of the board. 
B)  The chief executive officer reports to the board of directors. 
C)  The controller reports to the president. 
D)  The treasurer reports to the chief executive officer. 
E)  The chief operations officer reports to the vice president of production. 
A)  The vice president of finance reports to the chairman of the board. 
B)  The chief executive officer reports to the board of directors. 
C)  The controller reports to the president. 
D)  The treasurer reports to the chief executive officer. 
E)  The chief operations officer reports to the vice president of production.

Question 3

A partnership:

Accepted Answer

A)  is taxed the same as a corporation. 
B)  agreement defines whether the business income will be taxed like a partnership or a corporation. 
C)  terminates at the death of any general partner. 
D)  has less of an ability to raise capital than a proprietorship. 
E)  allows for easy transfer of interest from one general partner to another. 
A)  is taxed the same as a corporation. 
B)  agreement defines whether the business income will be taxed like a partnership or a corporation. 
C)  terminates at the death of any general partner. 
D)  has less of an ability to raise capital than a proprietorship. 
E)  allows for easy transfer of interest from one general partner to another.

Question 4

The mixture of debt and equity used by a firm to finance its operations is called:

Accepted Answer

A)  working capital management. 
B)  financial depreciation. 
C)  cost analysis. 
D)  capital budgeting. 
E)  capital structurE. 
A)  working capital management. 
B)  financial depreciation. 
C)  cost analysis. 
D)  capital budgeting. 
E)  capital structurE.

Question 5

One thing lenders sometimes require when loaning money to a small corporation is an assignment of the common stock as collateral on the loan. Then,if the business fails to repay its loan,the ownership of the stock certificates can be transferred directly to the lender. Why might a lender want such an assignment?
 What advantage of the corporate form of organization comes into play here?

Accepted Answer

In the event of a loan default,a lender

Question 6

The bylaws:

Accepted Answer

A)  establish the name of the corporation. 
B)  are rules which apply only to limited liability companies. 
C)  set forth the purpose of the firm. 
D)  mandate the procedure for electing corporate directors. 
E)  set forth the procedure by which the stockholders elect the senior managers of the firm. 
A)  establish the name of the corporation. 
B)  are rules which apply only to limited liability companies. 
C)  set forth the purpose of the firm. 
D)  mandate the procedure for electing corporate directors. 
E)  set forth the procedure by which the stockholders elect the senior managers of the firm.

Question 7

A business owned by a single individual is called a:

Accepted Answer

A)  corporation. 
B)  sole proprietorship. 
C)  general partnership. 
D)  limited partnership. 
E)  limited liability company. 
A)  corporation. 
B)  sole proprietorship. 
C)  general partnership. 
D)  limited partnership. 
E)  limited liability company.

A conflict of interest between the stockholders and management of a firm is called:

Which one of the following statements is correct concerning the organizational structure of a corporation?

A partnership:

The mixture of debt and equity used by a firm to finance its operations is called:

The bylaws:

A business owned by a single individual is called a:

Financial Statements and Cash Flow

Financial Statements Analysis and Financial Models

Discounted Cash Flow Valuation

Net Present Value and Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, and Capital Budgeting

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return: Lessons From Market History

Return and Risk: the Capital Asset Pricing Model Capm

An Alternative View of Risk and Return: The Arbitrage Pricing Theory

Risk, Cost of Capital, and Valuation

Efficient Capital Markets and Behavioral Challenges

Long-Term Financing

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Valuation and Capital Budgeting for the Levered Firm

Dividends and Other Payouts

Raising Capital

Leasing

Options and Corporate Finance

Options and Corporate Finance: Extensions and Applications

Warrants and Convertibles

Derivatives and Hedging Risk

Short-Term Finance and Planning

Cash Management

Credit and Inventory Management

Mergers, Acquisitions, and Divestitures

Financial Distress

International Corporate Finance

Filters

Exam 1: Introduction to Corporate Finance

A conflict of interest between the stockholders and management of a firm is called:

Which one of the following statements is correct concerning the organizational structure of a corporation?

A partnership:

The mixture of debt and equity used by a firm to finance its operations is called:

The bylaws:

A business owned by a single individual is called a:

Financial Statements and Cash Flow

Financial Statements Analysis and Financial Models

Discounted Cash Flow Valuation

Net Present Value and Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, and Capital Budgeting

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return: Lessons From Market History

Return and Risk: the Capital Asset Pricing Model Capm

An Alternative View of Risk and Return: The Arbitrage Pricing Theory

Risk, Cost of Capital, and Valuation

Efficient Capital Markets and Behavioral Challenges

Long-Term Financing

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Valuation and Capital Budgeting for the Levered Firm

Dividends and Other Payouts

Raising Capital

Leasing

Options and Corporate Finance

Options and Corporate Finance: Extensions and Applications

Warrants and Convertibles

Derivatives and Hedging Risk

Short-Term Finance and Planning

Cash Management

Credit and Inventory Management

Mergers, Acquisitions, and Divestitures

Financial Distress

International Corporate Finance

Filters