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Exam (elaborations)

FIN301 Practice Exam Questions with Verified Answers

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  • Course
  • FIN 301
  • Institution
  • FIN 301

Maximize the shareholder value of the firm - Answer-What is the primary goal of financial managers? c. In class, my analogy for net working capital was "cash in your wallet"; a firm may need short term funding in case on an emergency, but it isn't making you much of a return - Answer-Which of th...

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  • August 24, 2024
  • 4
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • FIN 301
  • FIN 301
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FIN301 Practice Exam Questions with
Verified Answers
Maximize the shareholder value of the firm - Answer-What is the primary goal of
financial managers?

c. In class, my analogy for net working capital was "cash in your wallet"; a firm may
need short term funding in case on an emergency, but it isn't making you much of a
return - Answer-Which of the following statements about Net Working Capital is TRUE?
a. The management of net working capital is part of the Capital Budgeting function of
financial managers
b. In the cash flow identity question from Chapter 2, changes in net working capital are
used to calculate Cash Flows from Creditors
c. In class, my analogy for net working capital was "cash in your wallet"; a firm may
need short term funding in case on an emergency, but it isn't making you much of a
return
d. An increase in property, plant, and equipment (PP&E) causes net working capital to
increase

c. The U.S. is one of the only countries that doesn't use a double taxation policy. -
Answer-Which of the following is NOT true about double taxation?
a. Double taxation refers to dividends being taxed twice: once at the corporate level and
once again when the dividends are paid out.
b. Double taxation is at least somewhat beneficial because it reduced the ability of
managers to tunnel profits out of firms that are part of pyramid ownership structures
c. The U.S. is one of the only countries that doesn't use a double taxation policy.
d. Double taxation policies alone are not enough to fully prevent self-dealing; strong
transfer pricing laws and the ability for shareholders to "vote with their feet" are also
needed.

d. A secondary capital market transaction - Answer-If you sell your shares in a company
to another investor, this is an example of what kind of transaction?

c. Government/treasury bonds, corporate bonds, large company stocks, small company
stocks - Answer-Which of the following securities in correctly in order from "lowest
expected returns" to "highest expected returns"?
a. Small company stocks, large company stocks, corporate bonds, government/treasury
bonds
b. Large company stocks, small company stocks, corporate bonds, government/treasury
bonds
c. Government/treasury bonds, corporate bonds, large company stocks, small company
stocks
d. Corporate bonds, government/treasury bonds, small company stocks, large company
stocks

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