for this posting, I will reveal the most frequently asked question in Financial Management Subject for our examination scope. perhaps these questions will come out in our first test for this semester. these questions covered chapter 1 and 2.
The questions consist True and False, MCQ
True and False Qs
1. Profit maximization is not goal of the firm because accounting profits do not accurately measure the timing and uncertainty of a company's cash flows. - True
2. It is easier to raise for a sole proprietorship rather than for a corporation because banks prefer to deal with only one owner- False
3. The goal of the firm's financial managers should be the maximization of the total value of the firm's stock - True
4.For a firm to have its securities listed on an exchange, it must meet certain requirements. These usually include measures of profitability, size, market value, and public ownership - True
5.Financial markets exists in order to allocate savings in the economy to the demander of those savings. - True
6. Working capital refers to investment in current assets, while net working capital is the difference between current assets and current liabilities. - True
MCQ
1. The maximization of shareholder wealth as a goal is superior to profit maximization because
a. It considers the time value of the money
b. Following the goal of shareholder wealth maximization will ensure high stock prices
c.It considers uncertainty
d. a and c
2. Which of the following is an advantage if the sole proprietorship?
a. limited liability for its owners
b.double taxation for its owners
c.no significant legal requirement for starting the business
d.easily transferred ownership
3. The true owners of the corporations are the:
a. holders of debt issues of the firm
b.preferred stockholders
c. board of directors of the firm
d.common stockholders
4. The cheapest form of business to organize is generally the:
a. sole proprietorship
b.general partnership
c. limited partnership
d. corporation
5. Benefits of an organized security exchange include:
a. Helping companies raise new capital
b. Establishing and publicizing fair security prices
c. Providing a continuous market
d. All of the above
6. An example of a primary market transaction is:
a. A new issue of common stock by Ahmad Finance Bank
b. A sale of some outstanding common stock of CIMB by an investor
c. Ahmad Finance repurchasing its own stock from a stockholders
d. All of the above
7. One of the benefits of organized security exchanges in that they are said to provide a ______ market
a. continuous
b. discontinuous
c.temporary
d.efficient
8.The cost involved with issuing securities to the public can be high. Some types of securities have greater associated with them than others. Which if the following is the most costly security to issue
a. Common Stock
b. Corporate bonds
c. Preferred Stock
d. All of the above
9. If an investor is said to be "risk averse" then that investor:
a. Will not be induced to take on any risk
b. Will only take on the least risk possible
c. Will only take on additional risk if they expect to be compensated in the form of additional return
d. is no behaving in a typical manner
10. Advantages of the corporate form of business organization include:
a. easier transfer of ownership
b. Double taxation
c. minimal legal requirements
d. none of the above
11. Which form of organization is free of initial requirements:
a. Sole proprietorship
b. General partnership
c. Corporation
d. A and B
12. Which of the following are tax deductible items to a corporation:
a. interest expenses
b. Dividends to common stockholders
c. Dividends to preferred stockholders
d. None of the above
13.which of the following is the most important goal that a corporation should strive for?
a. Maximize earning per share
b. Maximize market shares
c. Maximize the profit
d. Maximize shareholders' wealth
14. Which of the following forms of business organization has the greatest ability to attract new capital?
a. Sole proprietorship
b. Corporation
c. General partnership
d. none of the above
ReplyDeleteNot everything that means less money is always good in time of crisis. Everyone wants to cut theit budgets but investments that are made in a difficult time are always pay of.
DTC eligible