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Corporate finance Questions and Correct Answers & Latest Updated
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  • Corporate Finance

The over all goal of the financial manager is to ____ o :## Maximize the company's stock market price Which of the below is the goal that according to most financial professionals corporate managers ought to pursue? o :## Maximize shareholder wealth Which of the following is an example of ali...

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  • August 25, 2024
  • 42
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • corporate finance questions and correct answers

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  • Corporate Finance
  • Corporate Finance

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1|Page: 2024/2025 Grade A+




Corporate finance Questions and Correct
Answers & Latest Updated
The over all goal of the financial manager is to ____


o :## Maximize the company's stock market price



Which of the below is the goal that according to most financial professionals corporate

managers ought to pursue?


o :## Maximize shareholder wealth



Which of the following is an example of aligning managers' personal interests with those of

the owners?


o :## Offer the managers shares of common stock of the firm



For corporations, maximizing the value of owners equity can also be stated as


o :## Maximizing the stock price



Which of the following personal decisions is NOT impacted by finance?


o :## All of these are impacted by finance



All of the below are advantages associated with a sole proprietorship (relative to a

corporation), EXCEPT


o :## Limited liability on the part of the owners




Master01: DO NOT COPY AND PASTE!! August 25, 2024 Latest Update

,2|Page: 2024/2025 Grade A+


Which of the following statements is correct?


o :## If the sole proprietorship gets sued, the owner is liable



As individual legal entities, corporations assume liability for their own debts, so the

shareholders hold


o :## Only limited liability



The sub-area of finance looks at firms decisions in acquiring and utilizing cash received from

investors or from retained earnings


o :## Financial management



The practice generally known as double taxation is due to


o :## Corporate incomes being taxed at the corporate level, then again at the shareholder level
when corporate profits are paid out as dividends



which financial statement reports a firm's assets, liabilities, and equity at a particular point

in time?


o :## balance sheet



which of the below should be the most alarming to a company's CEO looking at the

company's cash flow statement?


o :## a negative total for the operating activities section



Lemmon Inc. lists assets of $100 on its balance sheet. The firm's fixed assets have recently

been appraised at $140. The firm's balance sheet also lists current assets at $15. Current


Master01: DO NOT COPY AND PASTE!! August 25, 2024 Latest Update

,3|Page: 2024/2025 Grade A+


assets were appraised at $16.50. current liabilities book and market values stand at $12 and

the firm's long-term debt is $40. Calculate the market value of the firm's stockholders'

equity.


o :## $104.50



Which of the following activities result in an increase in a firm's cash?


o :## decrease in fixed assets



All of the following are reasons that one should be cautious in interpreting financial

statements except:


o :## All of these answers are reasons to be cautious in interpreting financial statements



Net working capital is computed as


o :## current assets minus current liabilities



If a company reports a large amount of net income on its income statement during a year,

the firm will have


o :## any of these scenarios are possible



All of the following are cash flows associated with financing activities except


o :## increase in account payable



Financial statements of a corporation can typically be found in




Master01: DO NOT COPY AND PASTE!! August 25, 2024 Latest Update

, 4|Page: 2024/2025 Grade A+

o :## the annual report



An equity-financed firm will


o :## pay more in income taxes than an otherwise identical debt-financed firm



Statement of cash flows Crispy Corporation has net cash flow from financing activities for

the last year of $20 million. The company paid $5 million in dividends last year. During the

year, the change in notes payable on the balance sheet was an increase of $2 million, and

change in common and preferred shtock was an increase of $3 million. The end of year

balance for long-term debt was $45 million. What was their beginning of year balance for

long-term debt?


o :## $25 million



Balance Sheet you are evaluating the balance sheet for campus corporation. From the

balance sheet you find the following balances: cash and marketable securities = $400,000,

accounts receivable = $200,000, inventory = $100,000, accrued wages and taxes = $10,000,

accounts payable = $300,000, and notes payable = $600,000. What is Campus's net working

capital?


o :## $-210,000



Acme Bricks balance sheet lists net fixed assets as $40 million. The fixed assets could

currently be sold for $50 million. Acme's current balance sheet shows current liabilities of

$15 million and net working capital of $12 million. If all current accounts were liquidated




Master01: DO NOT COPY AND PASTE!! August 25, 2024 Latest Update

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