Quiz 1
Insider trading is defined as
ï‚· a zero-plus game
ï‚· an individual buying or selling on the basis of material nonpublic information
ï‚· an individual buying or selling using non-SEC disclosure rules
ï‚· an individual using proper trading rules
The primary objective of the firm is:
�...
Quiz 1
Insider trading is defined as
ï‚· a zero-plus game
ï‚· an individual buying or selling on the basis of material nonpublic information
ï‚· an individual buying or selling using non-SEC disclosure rules
ï‚· an individual using proper trading rules
The primary objective of the firm is:
ï‚· social responsibility
ï‚· profit maximization
ï‚· long run survival
ï‚· shareholder wealth maximization
If a firm shows an accounting net income, then
ï‚· it will be able to repay all current liabilities on time
ï‚· it will not have a problem obtaining a bank loan
ï‚· it will not have a cash flow problem
ï‚· none of the above
____ are largely outside of the direct control of managers.
ï‚· Investment strategies
ï‚· Economic environmental factors
ï‚· Dividend policies
ï‚· Major policy decisions
The major factors that determine the market value of a company’s shares of stock
include the ___
ï‚· Risk of its cash flows
ï‚· Timing of its cash flows
ï‚· Book value of its assets
 Risk of it’s cash flows and the timing of its cash flows
Shareholder wealth is measured by the __ of the shareholders’ common stock
holdings.
ï‚· Historic value
ï‚· Market value
ï‚· Compound value
ï‚· Book value
A major advantage of the corporate form of business over both sole proprietorships
and partnerships is the
ï‚· Reduction in taxes
ï‚· Ease of formation
ï‚· Limited liability
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