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1、精品文档CHAPTER 1In troduct ion to Corporate FinanceII. CONCEPTSFINANCIAL MANAGEMENTd 21. Which of the following questions are addressed by financial managers?I. How long will it take to produce a product?II. How long should customers be give n to pay for their credit purchases?III. Should the firm borr
2、ow more mon ey?IV. Should the firm build a new factory?a. I and IV onlyb. II a nd III o nlyc. I, II, and III o nlyd. II, III, and IV onlye. I, II, III, and IVORGANIZATIONAL STRUCTUREe 22. The treasurer and the con troller of a corporati on gen erally report to the:a. board of directors.b. chairma n
3、of the board.c. chief executive officer.d. preside nt.e. vice preside nt of finance.ORGANIZATIONAL STRUCTUREb 23. Which one of the following statements is correct concerning the organizational structure of a corporati on?a. The vice preside nt of finance reports to the chairma n of the board.b. The
4、chief executive officer reports to the board of directors.c. The con troller reports to the preside nt.d. The treasurer reports to the chief executive officer.e. The chief operati ons officer reports to the vice preside nt of producti on.CAPITAL BUDGETINGb 24. Which one of the following is a capital
5、 budgeting decision?a. determ ining how much debt should be borrowed from a particular len derb. decidi ng whether or not to ope n a new storec. decidi ng whe n to repay a Ion g-term debtd. determ ining how much inven tory to keep on hande. determ ining how much money should be kept in the check ing
6、 acco untCAPITAL BUDGETINGe 25. When considering a capital budgeting project the financial manager shouldcon sider:a. on ly the size of the project.b. only the tim ing of the project cash flows.c. only the risk of the project cash flows.d. only the size and timing of the project cash flows.e. the si
7、ze, tim ing, and risk of the project cash flows.CAPITAL STRUCTUREa 26. Capital structure decisi ons in elude con siderati on of the:I. amount of Ion g-term debt to assume.II. cost of acquir ing fun ds.III. current assets and liabilities.IV. net work ing capital.a. I and II onlyb. II a nd III o nlyc.
8、 IIIa nd IV onlyd. I, II, and IV onlye. I, III, and IV onlyCAPITAL STRUCTUREe 27. The decision of which lender to use and which type of Iong-term loan is best for a project is part of:a. work ing capital man ageme nt.b. the net work ing capital decisi on.c. capital budgeti ng.d. a controller s dutie
9、s.e. the capital structure decisi on.WORKING CAPITAL MANAGEMENTe 28. Working capital management includes decisions concerning which of the follow ing?I. acco unts payableII. Ion g-term debtIII. acco unts receivableIV. inven torya. I and II onlyb. I and III onlyc. II a nd IV onlyd. I, II, and III o n
10、lye. I, III, and IV onlyWORKING CAPITAL MANAGEMENTe 29. Working capital management:a. en sures that sufficie nt equipme nt is available to produce the amount of product desiredon a daily basis.b. en sures that Ion g-term debt is acquired at the lowest possible cost.c. en sures that divide nds are pa
11、id to all stockholders on an annual basis.d. bala nces the amount of compa ny debt to the amount of available equity.e. is concerned with hav ing sufficie nt funds to operate the bus in ess on a daily basis.SOLE PROPRIETORSHIPd 30. Which one of the following statements concerning a sole proprietorsh
12、ip is correct?a. A sole proprietorship is the least com mon form of bus in ess own ership.b. The profits of a sole proprietorship are taxed twice.c. The owners of a sole proprietorship share profits as established by the part nershipagreeme nt.d. The owner of a sole proprietorship may be forced to s
13、ell his/her pers onal assets to paycompa ny debts.e. A sole proprietorship is often structured as a limited liability company.SOLE PROPRIETORSHIPa 31. Which one of the following statements concerning a sole proprietorship is correct?a. The life of the firm is limited to the life span of the owner.b.
14、 The owner can gen erally raise large sums of capital quite easily.c. The own ership of the firm is easy to tra nsfer to ano ther in dividual.d. The compa ny must pay separate taxes from those paid by the owner.e. The legal costs to form a sole proprietorship are quite substa ntial.PARTNERSHIPe 32.
15、Which one of the following best describes the primary advantage of being a limited part ner rather tha n a gen eral part ner?a. en titleme nt to a larger porti on of the part nership s in comeb. ability to man age the day-to-day affairs of the bus in essc. no pote ntial finan cial lossd. greater man
16、 ageme nt resp on sibilitye. liability for firm debts limited to the capital in vestedPARTNERSHIPb 33. A general partner:a. has less legal liability than a limited partner.b. has more man ageme nt resp on sibility tha n a limited part ner.c. faces double taxati on whereas a limited part ner does not
17、.d. cannot lose more tha n the amount of his/her equity in vestme nt.e. is the term applied only to corporati ons which in vest in part nerships.PARTNERSHIPc 34. A partnership:a. is taxed the same as a corporati on.b. agreeme nt defi nes whether the bus in ess in come will be taxed like a part nersh
18、ip or a corporati on.c. term in ates at the death of any gen eral part ner.d. has less of an ability to raise capital than a proprietorship.e. allows for easy tran sfer of in terest from one gen eral part ner to ano ther.精品文档精品文档PARTNERSHIPd 35.Which of the following are disadvantages of a partnersh
19、ip?I.limited life of the firmII.pers on al liability for firm debtIII.greater ability to raise capital than a sole proprietorshipIV.lack of ability to transfer partnership interesta.1 and II o nlyb.IIIa nd IV onlyc.II a nd III o nlyd.I, II, and IV onlye.I, III, and IV onlyCORPORATIONe 36.Which of th
20、e follow ing are adva ntages of the corporate form of bus in essown ership?I.II.limited liability for firm debt double taxati onIII.ability to raise capitalIV.unlimited firm lifea.1 and II o nlyb.IIIa nd IV onlyc.I, II, and III o nlyd.II, III, and IV onlye.I, III, and IV onlyCORPORATIONa37.Which one
21、 of the follow ing stateme nts is correct concerning corporati ons?a.The largest firms are usually corporati ons.b.The majority of firms are corporati ons.c.The stockholders are usually the man agers of a corporati on.d.The ability of a corporation to raise capital is quite limited.e.The in come of
22、a corporati on is taxed as pers onal in come of the stockholdersBUSINESS TYPESb38.Which one of the follow ing stateme nts is correct?a.Both part nerships and corporati ons in cur double taxati on.b.Both sole proprietorships and part nerships are taxed in a similar fashi on.c.Part nerships are the mo
23、st complicated type of bus in ess to form.d.Both part nerships and corporati ons have bylaws.e.All types of bus in ess formati ons have limited lives.ARTICLES OF INCORPORATIONc39.The articles of in corporati on:a.can be used to remove compa ny man ageme nt.b. are ame nded annu ally by the compa ny s
24、tockholders.c. set forth the nu mber of shares of stock that can be issued.d. set forth the rules by which the corporati on regulates its existe nee.e. can set forth the conditions under which the firm can avoid double taxation.BYLAWSd 40. The bylaws:a. establish the n ame of the corporati on.b. are
25、 rules which apply only to limited liability compa ni es.c. set forth the purpose of the firm.d. man date the procedure for elect ing corporate directors.e. set forth the procedure by which the stockholders elect the senior man agers of the firm.LIMITED LIABILITY COMPANYc 41. The owners of a limited
26、 liability company prefer:a. being taxed like a corporati on.b. having liability exposure similar to that of a sole proprietor.c. being taxed pers on ally on all bus in ess in come.d. having liability exposure similar to that of a general partner.e. being taxed like a corporation with liability like
27、 a partnership.CORPORATIONc 42. Which one of the follow ing bus in ess types is best suited to rais ing large amounts of capital?a. sole proprietorshipb. limited liability compa nyc. corporati ond. gen eral part nershipe. limited part nershipCORPORATIONd 43. Which type of bus in ess orga ni zati on
28、has all the respective rights and privileges of a legal pers on?a. sole proprietorshipb. gen eral part nershipc. limited part nershipd. corporati one. limited liability compa nyGOAL OF FINANC IAL MANAGEMENTc 44. Finan cial man agers should strive to maximize the curre nt value per share of the exist
29、i ng stock because:a. doing so guarantees the company will grow in size at the maximum possible rate.b. doing so in creases the salaries of all the employees.c. the curre nt stockholders are the own ers of the corporati on.d. doing so means the firm is growing in size faster than its competitors.e.
30、the man agers ofte n receive shares of stock as part of their compe nsati on.GOAL OF FINANCIAL MANAGEMENTd 45. The decisi ons made by finan cial man agers should all be ones which in crease thea. size of the firm.b. growth rate of the firm.c. marketability of the man agers.d. market value of the exi
31、st ingown ers equity.e. finan cial distress of the firm.AGENCY PROBLEMc 46. Which one of the following actions by a financial manager creates an agency problem?a. refus ing to borrow money whe n doing so will create losses for the firmvalueb. refusing to lower selling prices if doing so will reduce
32、the net profitsc. agree ing to expa nd the compa ny at the expe nse of stockholdersd. agree ing to pay bonu ses based on the market value of the compa ny stocke. in creas ing curre nt costs in order to in crease the market value of the stockholders equityAGENCY PROBLEMe 47. Which of the following he
33、lp convince managers to work in the best interest of the stockholders?I. compe nsati on based on the value of the stockII. stock opti on pla nsIII. threat of a compa ny takeoverIV. threat of a proxy fighta. I and II onlyb. IIIand IV onlyc. I, II, and III o nlyd. I, III, and IV onlye. I, II, III, and
34、 IVAGENCY PROBLEMd 48. Which form of bus in ess structure faces the greatest age ncy problems?a. sole proprietorshipb. gen eral part nershipc. limited part nershipd. corporati one. limited liability compa nyAGENCYCOSTc 49. Which of the following are agency costs?I. forgoing an in vestme nt opport un
35、 ity which would add to the market value of the owner s equityII. pay ing a divide nd to each of the existi ng shareholdersIII. purchas ing new equipme nt which in creases the value of each share of stockIV. hiri ng outside auditors to verify the accuracy of the compa ny finan cial stateme ntsa. II
36、a nd III o nlyb. I and III onlyc. I and IV onlyd. II a nd IV onlye. I, II, and IV onlySTAKEHOLDERSa 50. Which one of the following parties is considered a stakeholder of a firm?a. employeeb. short-term creditorc. Ion g-term creditord. preferred stockholdere. com mon stockholderCASH FLOWSb 51.Which o
37、f the following represent cash outflows from a firm?I. issua nee of securitiesII. payme nt of divide ndsIII. new loa n proceedsIV. payme nt of gover nment taxesa. I and III onlyb. II a nd IV onlyc. I and IV onlyd. I, II, and IV onlye. II, III, and IV onlyPRIMARY MARKETb 52. Which one of the followin
38、g is a primary market transaction?a. a dealer selli ng shares of stock to an in dividual in vestorb. a dealer buying n ewly issued shares of stock from a corporati onc. an in dividual in vestor selli ng shares of stock to ano ther in dividuald. a bank selli ng shares of a medical firm to an in divid
39、uale. a sole proprietor buying shares of stock from an in dividual in vestorAUCTION MARKETb 53. Which of the following statements concerning auction markets is (are) correct?I. NASDAQ is an auctio n market.II. The NYSE is an auction market.III. All trades involve a dealer in an auction market.IV. An
40、 aucti on market is called an over-the-co un ter market.a. I on lyb. II o nlyc. I and III onlyd. II a nd III o nlye. II a nd IV onlySTOCK EXCHANGEd 54. Which one of the following statements concerning stock exchanges is correct?a. The NYSE has more listed stocks than NASDAQ.b. The NYSE is a dealer m
41、arket.c. The excha nge with the strictest list ing requireme nts is NASDAQ.d. Some large compa nies are listed on NASDAQ.e. Most debt securities are traded on the NYSE.DEALER MARKETSc 55. Dealer markets:a. are reserved strictly for tradi ng debt securities.b. only exist outside of the Un ited States
42、.c. are called over-the-co un ter markets.d. in clude the America n Excha nge and the Pacific Stock Excha nge.e. list only the securities of the largest firms.NYSEa 56. Which one of the following statements is correct concerning the NYSE?a. A firm is expected to have a market value for its publicly
43、held shares of at least $100 million to be listed on the NYSE.b. The NYSE is the largest dealer market for listed securities in the United States.c. The NYSE acco unts for on ly 50 perce nt of the shares traded in the auct ion markets.d. Any corporati on desiri ng to be listed on the NYSE can do so.
44、e. The NYSE is an over-the-co un ter excha nge functioning as both a primary and a sec on dary market.NASDAQd 57. Which of the following statements concerning NASDAQ are correct?I. Most smaller firms are listed on NASDAQ rather than on the NYSE.II. NASDAQ is an electr on ic market.III. NASDAQ is an auctio n market.IV. NASDAQ is an OTC market.a. I and II onlyb. I and III onlyc. II a nd IV onlyd. I, II, and IV onlye. I, II, III, and IV