Question 1

If shareholders are unhappy with a CEO's performance,they are most likely to:

Accepted Answer

A) buy more shares in an effort to gain control of the firm. 
B) file a shareholder resolution. 
C) replace the CEO through a grassroots shareholder uprising. 
D) sell their shares. 
A) buy more shares in an effort to gain control of the firm. 
B) file a shareholder resolution. 
C) replace the CEO through a grassroots shareholder uprising. 
D) sell their shares.

Question 2

Use the table for the question(s)below.
Consider the following two quotes for XYZ stock:  
-How much would you receive if you sold 200 shares of XYZ stock on November 11th?

Accepted Answer

A) $5050 
B) $5040 
C) $5186 
D) $5200 
A) $5050 
B) $5040 
C) $5186 
D) $5200

Question 3

What strategies are available to shareholders to help ensure that managers are motivated to act in the interest of the shareholders rather than their own interest?

Accepted Answer

1.The threat of a ho

Question 4

A sole proprietorship is owned by:

Accepted Answer

A) one person. 
B) two of more persons. 
C) shareholders. 
D) bankers. 
A) one person. 
B) two of more persons. 
C) shareholders. 
D) bankers.

Question 5

Do corporate decisions that increase the value of the firm's equity benefit society as a whole?

Accepted Answer

A) Yes,as long as the value of the firm's equity increases,society is better off. 
B) Yes,as long as the increase in the value of the firm's equity does not come at the expense of others. 
C) No,any gain in the value of the firm's equity is always less than the cost to society. 
D) No,any gains in the value of the firm's equity are perfectly offset by societal costs. 
A) Yes,as long as the value of the firm's equity increases,society is better off. 
B) Yes,as long as the increase in the value of the firm's equity does not come at the expense of others. 
C) No,any gain in the value of the firm's equity is always less than the cost to society. 
D) No,any gains in the value of the firm's equity are perfectly offset by societal costs.

Question 6

The largest stock market in the world by volume is:

Accepted Answer

A) the London Stock Exchange. 
B) NASDAQ. 
C) the American Stock Exchange. 
D) the New York Stock Exchange. 
A) the London Stock Exchange. 
B) NASDAQ. 
C) the American Stock Exchange. 
D) the New York Stock Exchange.

Question 7

Which of the following statements is FALSE?

Accepted Answer

A) In bankruptcy,management is given the opportunity to reorganize the firm and renegotiate with debt holders. 
B) Because a corporation is a separate legal entity,when it fails to repay its debts,the people who lent to the firm,the debt holders are entitled to seize the assets of the corporation in compensation for the default. 
C) As long as the corporation can satisfy the claims of the debt holders,ownership remains in the hands of the equity holders. 
D) If the corporation fails to satisfy debt holders' claims,debt holders may lose control of the firm. 
A) In bankruptcy,management is given the opportunity to reorganize the firm and renegotiate with debt holders. 
B) Because a corporation is a separate legal entity,when it fails to repay its debts,the people who lent to the firm,the debt holders are entitled to seize the assets of the corporation in compensation for the default. 
C) As long as the corporation can satisfy the claims of the debt holders,ownership remains in the hands of the equity holders. 
D) If the corporation fails to satisfy debt holders' claims,debt holders may lose control of the firm.

Question 8

Explain the main differences between the NYSE and NASDAQ stock markets.

Accepted Answer

Key points:
NYSE has physical location -

Question 9

You overhear your manager saying that she plans to book an Ocean-view room on her upcoming trip to Miami for a meeting.You know that the interior rooms are much less expensive and that your manager is traveling at the Company's expense.This use of additional funds comes about as a result of:

Accepted Answer

A) an agency problem. 
B) an adverse selection problem. 
C) a moral hazard. 
D) a publicity problem. 
A) an agency problem. 
B) an adverse selection problem. 
C) a moral hazard. 
D) a publicity problem.

Question 10

Which of the following organization forms for a business does NOT avoid double taxation?

Accepted Answer

A) Limited partnership 
B) "C" corporation 
C) "S" corporation 
D) Limited liability company 
A) Limited partnership 
B) "C" corporation 
C) "S" corporation 
D) Limited liability company

Question 11

If you buy shares of Coca-Cola on the secondary market:

Accepted Answer

A) Coca-Cola receives the money because the company has issued new shares. 
B) you buy the shares from another investor who decided to sell the shares. 
C) you buy the shares from the New York Stock Exchange. 
D) you buy the shares from the Federal Reserve. 
A) Coca-Cola receives the money because the company has issued new shares. 
B) you buy the shares from another investor who decided to sell the shares. 
C) you buy the shares from the New York Stock Exchange. 
D) you buy the shares from the Federal Reserve.

Question 12

You own 100 shares of a Sub Chapter "S" corporation.The corporation earns $5.00 per share before taxes.Once the corporation has paid any corporate taxes that are due,it will distribute the rest of its earnings to its shareholders in the form of a dividend.If the corporate tax rate is 40% and your personal tax rate on (both dividend and non-dividend)income is 30%,then how much money is left for you after all taxes have been paid?

Accepted Answer

A) $210 
B) $300 
C) $350 
D) $500 
A) $210 
B) $300 
C) $350 
D) $500

Question 13

Explain the benefits of incorporation.

Accepted Answer

1.Limited liability

Question 14

If you buy shares of Coca-Cola on the primary market:

Accepted Answer

A) Coca-Cola receives the money because the company has issued new shares. 
B) you buy the shares from another investor who decided to sell the shares. 
C) you buy the shares from the New York Stock Exchange. 
D) you buy the shares from the Federal Reserve. 
A) Coca-Cola receives the money because the company has issued new shares. 
B) you buy the shares from another investor who decided to sell the shares. 
C) you buy the shares from the New York Stock Exchange. 
D) you buy the shares from the Federal Reserve.

Question 15

A limited liability company is essentially:

Accepted Answer

A) a limited partnership without limited partners. 
B) a limited partnership without a general partner. 
C) just another name for a limited partnership. 
D) just another name for a corporation. 
A) a limited partnership without limited partners. 
B) a limited partnership without a general partner. 
C) just another name for a limited partnership. 
D) just another name for a corporation.

Question 16

Use the table for the question(s)below.
Consider the following two quotes for XYZ stock:  
-How much would you have to pay to purchase 100 shares of XYZ stock on November 18th?

Accepted Answer

A) $2520 
B) $2525 
C) $2593 
D) $2600 
A) $2520 
B) $2525 
C) $2593 
D) $2600

Question 17

Which of the following statements is most correct?

Accepted Answer

A) An advantage to incorporation is that it allows for less regulation of the business. 
B) An advantage of a corporation is that it is subject to double taxation. 
C) Unlike a partnership,a disadvantage of a corporation is that has limited liability. 
D) Corporations face more regulations when compared to partnerships. 
A) An advantage to incorporation is that it allows for less regulation of the business. 
B) An advantage of a corporation is that it is subject to double taxation. 
C) Unlike a partnership,a disadvantage of a corporation is that has limited liability. 
D) Corporations face more regulations when compared to partnerships.

Question 18

The largest stock market in the world by market capitalization is:

Accepted Answer

A) the London Stock Exchange. 
B) NASDAQ. 
C) the American Stock Exchange. 
D) the New York Stock Exchange. 
A) the London Stock Exchange. 
B) NASDAQ. 
C) the American Stock Exchange. 
D) the New York Stock Exchange.

Exam 1: The Corporation

If shareholders are unhappy with a CEO's performance,they are most likely to:

Use the table for the question(s)below. Consider the following two quotes for XYZ stock: -How much would you receive if you sold 200 shares of XYZ stock on November 11th?

What strategies are available to shareholders to help ensure that managers are motivated to act in the interest of the shareholders rather than their own interest?

A sole proprietorship is owned by:

Do corporate decisions that increase the value of the firm's equity benefit society as a whole?

The largest stock market in the world by volume is:

Which of the following statements is FALSE?

Explain the main differences between the NYSE and NASDAQ stock markets.

You overhear your manager saying that she plans to book an Ocean-view room on her upcoming trip to Miami for a meeting.You know that the interior rooms are much less expensive and that your manager is traveling at the Company's expense.This use of additional funds comes about as a result of:

Which of the following organization forms for a business does NOT avoid double taxation?

If you buy shares of Coca-Cola on the secondary market:

Explain the benefits of incorporation.

If you buy shares of Coca-Cola on the primary market:

A limited liability company is essentially:

Use the table for the question(s)below. Consider the following two quotes for XYZ stock: -How much would you have to pay to purchase 100 shares of XYZ stock on November 18th?

Which of the following statements is most correct?

The largest stock market in the world by market capitalization is:

Introduction to Financial Statement Analysis

Financial Decision Making and the Law of One Price

The Time Value of Money

Interest Rates

Valuing Bonds

Investment Decision Rules

Fundamentals of Capital Budgeting

Valuing Stocks

Capital Markets and the Pricing of Risk

Optimal Portfolio Choice and the Capital Asset Pricing Model

Estimating the Cost of Capital

Investor Behavior and Capital Market Efficiency

Capital Structure in a Perfect Market

Debt and Taxes

Financial Distress,managerial Incentives,and Information

Payout Policy

Capital Budgeting and Valuation With Leverage

Valuation and Financial Modeling: a Case Study

Financial Options

Option Valuation

Real Options

Raising Equity Capital

Debt Financing

Leasing

Working Capital Management

Short-Term Financial Planning

Mergers and Acquisitions

Corporate Governance

Risk Management

International Corporate Finance

Filters