Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?
Correct answer(s):
- increase in the market value per share
Topic
Introduction to Corporate Finance
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Quizzes in Introduction to Corporate Finance
Which one of the following best states the primary goal of financial management?
Correct answer(s):
- maximize the current value per share
Sally and Alicia currently are general partners in a business located in Atlanta, Georgia. They are content with their current tax situation but are both very uncomfortable with the unlimited liability to which they are each subjected. Which form of business entity should they consider to replace their general partnership assuming they wish to remain the only two owners of their business? Whichever organization they select, they wish to be treated equally.
Correct answer(s):
- limited liability company
Sam, Alfredo, and Juan want to start a small U.S. business. Juan will fund the venture but wants to limit his liability to his initial investment and has no interest in the daily operations. Sam will contribute his full efforts on a daily basis but has limited funds to invest in the business. Alfredo will be involved as an active consultant and manager and will also contribute funds. Sam and Alfredo are willing to accept liability for the firm’s debts as they feel they have nothing to lose by doing so. All three individuals will share in the firm’s profits and wish to keep the initial organizational costs of the business to a minimum.
Which form of business entity should these individuals adopt?
Correct answer(s):
- limited partnership
Which type of business organization has all the respective rights and privileges of a legal person?
Correct answer(s):
- corporation
Which one of the following business types is best suited to raising large amounts of capital?
Correct answer(s):
- corporation
Which one of the following characteristics applies to a limited liability company?
Correct answer(s):
- taxed similar to a partnership
Corporate bylaws:
Correct answer(s):
- determine how a corporation regulates itself.
Which one of the following statements is correct?
Correct answer(s):
- Both sole proprietorship and partnership income is taxed as individual income.
Which one of the following statements is correct?
Correct answer(s):
- Corporations can raise large amounts of capital generally easier than partnerships can.
A limited partnership:
Correct answer(s):
- has a greater ability to raise capital than a sole proprietorship.
A general partner:
Correct answer(s):
- is solely responsible for all the partnership debts.
Which one of the following best describes the primary advantage of being a limited partner instead of a general partner?
Correct answer(s):
- maximum loss limited to the capital invested
Which one of the following statements concerning a sole proprietorship is correct?
Correct answer(s):
- A sole proprietorship is taxed the same as a C corporation.
Which one of the following statements concerning a sole proprietorship is correct?
Correct answer(s):
- The owner of a sole proprietorship is personally responsible for all of the company's debts.
Which one of the following is a working capital management decision?
Correct answer(s):
- determining whether to pay cash for a purchase or use the credit offered by the supplier
The decision to issue additional shares of stock is an example of which one of the following?
Correct answer(s):
- capital structure decision
Which one of the following is a capital structure decision?
Correct answer(s):
- determining how much debt should be assumed to fund a project
Which one of the following is a capital budgeting decision?
Correct answer(s):
- deciding whether or not to purchase a new machine for the production line
Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?
Correct answer(s):
- The treasurer reports to the vice president of finance.