Why should financial managers strive to maximize the current value per share of the existing stock?
because they have been hired to represent the interests of the current shareholders
A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:
Which of the following individuals have unlimited liability based on their ownership interest?
I. general partner II. sole proprietor III. stockholder IV. limited partner
I and II only
Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange. This transaction:
was facilitated in the secondary market.
Public offerings of debt and equity must be registered with which one of the following?
Securities and Exchange Commission
Which one of the following statements concerning stock exchanges is correct?
Some large companies are listed on NASDAQ.
Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?
A firm which opts to "go dark" in response to the Sarbanes-Oxley Act:
can provide less information to its shareholders than it did prior to "going dark".
hich of the following questions are addressed by financial managers?
I. How should a product be marketed? II. Should customers be given 30 or 45 days to pay for their credit purchases? III. Should the firm borrow more money? IV. Should the firm acquire new equipment?
II, III, and IV only
The decision to issue additional shares of stock is an example of which one of the following?
capital structure decision
General rules used as the basis for decision making are referred to as:
Old Country Productions requires skilled furniture finishers to put the final touches on all of the furniture it produces. The firm hired two individuals last year who had been students in Mr. Tedwell's wood shop class in high school. Both of these employees have demonstrated exceptional skills and have already been promoted to senior finishing positions. The firm currently has an opening for one additional finisher. Tom, the head of the finishing section, has stipulated that he only wants to interview candidates who have completed Mr. Tedwell's course. Tom's behavior is typical of someone who has which one of the following characteristic behaviours?
Steve purchased a stock last year for $34 a share. The stock increased in value to $36 a share before declining to its current value of $30. Steve has decided to sell the stock, but only if he can receive $34 a share or better. Steve is suffering most from which one of the following behavioral conditions?
As the interest rate increases, the future value of $9,000 to be received 6 years from now
As the interest rate increases, the present value of $2,000 to be received 4 years from now
Which of the following statements concerning the effective annual rate are TRUE?
I. When making financial decisions, you should compare effective annual
rates rather than annual percentage rates.
II. The more frequently interest is compounded, the higher the effective
III. A quoted rate of 6 percent compounded continuously has a higher
effective annual rate than if the rate were compounded daily.
IV. When choosing which loan to accept, you should select the offer with the
highest effective annual rate.
I, II, and III only
Want to see the other 16 Flashcards in Final?JOIN TODAY FOR FREE!