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The Financial Environment Flashcards | StudBud
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The Financial Environment
The Financial Environment
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1
The ultimate goal of a publicly-owned firm is to ..................................
Minimize the chances of losses
Maximize the firm's expected EPS
Maximize the firm's expected total income
Maximize the stock price
2
One drawback of switching from a partnership to the corporate form of organization is the following.................
It cannot affect the amount of the firm's operating income that goes to tax
It subjects the firm to additional regulations
It makes it more difficult for the firm to raise additional capital
The firm’s investors will be subject to personal liabilities
3
You buy 30k shares from your brother, (no broker) you just give him cash and he gives you the stock, this ........Market
Secondary
Primary
SWAP
Third (OTC )
4
Which of the following statements is CORRECT?
sole-proprietorship is subject double taxation
Sole proprietorship has extensive legal documents are required.
One advantage of a corporation is that investors facing less Liabilities
Corporations face fewer regulations than sole proprietorship
5
Which of the following statements is CORRECT?
Corporations generally face fewer regulations than sole-proprietorship.
Corporate shareholders are exposed to unlimited liability
Transfer of ownership in corporation is easier than sole proprietorship
Corporation generally have limited life than sole-proprietorship
6
IBM issues 2 M newly shares and sells them to the public through an investment banker, This Consider as.........Market
Third
Secondary
Over the Counter
Primary
7
is the set of rules that control a company’s behavior towards its directors, managers, employees and all stack-holders
Management Decisions
Corporate Governance
Code of Conduct & Ethics
Company Policy and Procedures
8
Advantage of partnership or corporation that both offer their owners limited liability, where sole proprietorship do not
True
False
9
Money markets are markets for............................
Foreign Currency
Stocks
Bonds
Short-term debt securities e.g. Treasury Bills
10
Disadvantages of sole proprietorship are; difficulty of raising new capital and the unlimited personal liability
False
True
11
If an Retail investor buys/sells a currently outstanding stock through a broker, this is a primary market transaction
False
True
12
XYZ co. sale 5M newly shares @ $21, co. sold all stocks to investment banker who sold them again,This is primary Market
True
False
13
If a firm's goal is to maximize its EPS, this is the best way to maximize share Price to increase shareholders wealth
True
False
14
if you sell 20,000 shares of IBM stock through your broker, this transactions will classified as .............Market
Over The Counter
Primary
Third
Secondary
15
Which of the following statements is CORRECT?
The IPO market is a subset of the secondary market
if ABC issued newly stocks , this Consider as secondary market transaction
If you Buy 10,000 shares from your brother, this consider as Primary TNX.
money market involve debt securities with maturities of less than one year
