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