Quiz__Midterm_Exam From Intro to Financial Management to Basics of Working Capital Management
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Grado
BSN 101 (BSN101)
Institución
University Of The East, Manila
Midterm Exam
Started: Mar 20 at 4:05pm
Quiz Instructions
Topics: From Intro to Financial Management to Basics of Working Capital Management 65 Items. Only 1 attempt is allowed per student.
The test can be answered in 3 hours, but I'm giving you 8 hours to answer it. This is to give you enou...
Quiz Instructions
Topics: From Intro to Financial Management to Basics of Working Capital
Management 65 Items. Only 1 attempt is allowed per student.
The test can be answered in 3 hours, but I'm giving you 8 hours to answer it. This is to give you enough time to fix any
technical problems you encounter.
Make sure your internet is stable before taking the test.
Question 1 1 pts
A disadvantage of the corporate form of organization is that corporate stockholders are more exposed to personal
liabilities in the event of bankruptcy than are investors in a typical partnership.
True
False
,3/20/202 Quiz: Midterm
3 Exam
Question 2 1 pts
One advantage of the corporate form of organization is that it avoids double taxation.
True
False
Question 3 1 pts
It is generally harder to transfer one's ownership interest in a partnership than in a corporation.
True
False
Question 4 1 pts
The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to
,3/20/202 Quiz: Midterm
3 Exam
Maximize its expected total corporate income Maximize its expected EPS.
Maximize the stock price on a specific target date.
Maximize the stock price per share over the long run, which is the stock's intrinsic value.
Question 5 1 pts
The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be to
Maximize the firm's expected EPS, which must also maximize the firm's price per share.
Since it is impossible to measure a stock's intrinsic value, the text states that it is better for managers to attempt to maximize the current
stock price than its intrinsic value.
Minimize the firm's risks because most stockholders dislike risk. In turn, this will maximize the firm's stock price.
Use a well-structured managerial compensation package to reduce conflicts that may exist between stockholders and managers.
Question 6 1 pts
Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers?
, 3/20/202 Quiz: Midterm
3 Exam
Beef up the restrictive covenants in the firm's debt agreements
Eliminate a requirement that members of the board of directors must hold a high percentage of their personal wealth in the firm's stock.
Change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover.
Pay managers large cash salaries and give them no stock options.
Question 7 1 pts
You recently sold 200 shares of Disney stock, and the transfer was made through a broker. This is an example of:
A futures market transaction.
A secondary market transaction.
An over-the-counter market transaction. A
primary market transaction.
Question 8 1 pts
Which of the following statements is NOT CORRECT?
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