Corporate Finance MCQs

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The person generally directly responsible for overseeing the tax management, cost accounting, financial accounting, and data processing functions is ...






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The person generally directly responsible for overseeing the cash and credit functions, financial planning, and capital expenditures is the:






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The process of identifying projects which will produce positive cash flows is called:






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The mix of debt and equity capital for a firm is referred to as the firm's:






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The management of a firm's short-term assets and liabilities is called:






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A business owned by a solitary individual is called a:






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The division of profits and losses among the members of a partnership is formalized in the:






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The business purpose and intended life of a corporation are set forth in the:






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The rules governing the method of electing corporate directors are called:






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A business entity which taxes it owners like partners while providing those owners with limited liability is called a:






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A conflict of interest between the stockholders and company management is called:






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Agency costs refer to:






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A stakeholder is:






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The primary market is the market in which:






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The secondary market is the market in which:






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A secondary market where an individual or entity buys and sells for themselves at their own risk is called a _____ market.






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A market where brokers and agents match buyers with sellers is called a(n):






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Which of the following questions are addressed by financial managers? I. How long will it take to produce a product? II. Should customers be given 3...






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The treasurer of a corporation generally reports to the:






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Which one of the following correctly defines the chain of command in a typical corporate organizational structure?






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Which one of the following is a capital budgeting decision?






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When considering a capital budgeting project the financial manager should consider the: I. size of the project. II. timing of the project's cas...






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Capital structure decisions include which of the following?






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The decision to issue debt rather than additional shares of stock is an example of:






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Working capital management includes decisions concerning which of the following? I. accounts payable II. long-term debt III. accounts receivable I...






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Working capital management:






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Which one of the following statements concerning a sole proprietorship is correct?






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Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?






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A general partner:






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A partnership:






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Which of the following are disadvantages of a partnership? I. limited life of the firm II. personal liability for firm debt III. greater ability to...






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Which of the following are advantages of the corporate form of business ownership? I. limited liability for firm debt II. double taxation III. abil...






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Which one of the following statements is correct concerning corporations?






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Which one of the following statements is correct?






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The articles of incorporation:






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The bylaws:






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The owners of a limited liability company prefer:






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Which one of the following business types is best suited to raising large amounts of capital?






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Which type of business organization has all the respective rights and privileges of a legal person?






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The primary goal of financial management is to:






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Financial managers should strive to maximize the current value per share of the existing stock because:






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The decisions made by financial managers should all be ones which increase the:






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The Sarbanes-Oxley Act of 2002 is a governmental response to:






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The Sarbanes-Oxley Act of 2002:






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A firm which opts to "go dark" in response to the Sarbanes-Oxley Act:






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Which one of the following actions by a financial manager creates an agency problem?






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Which of the following help convince managers to work in the best interest of the stockholders? I. compensation based on the value of the stock II....






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Which of the following are agency costs? I. forgoing an investment opportunity which would add to the market value of the owner's equity II. p...






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Which of the following represent cash outflows from a firm? I. issuance of securities II. payment of dividends III. new loan proceeds IV. payment ...






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Which one of the following parties is considered a stakeholder of a firm?






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Which of the following represent means by which cash flows from a corporation back into the financial markets? I. repayment of long-term debt II. p...






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Which one of the following is a primary market transaction?






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The transfer of ownership of outstanding shares of a NYSE listed stock:






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Which of the following statements concerning auction markets is (are) correct? I. NASDAQ is an auction market. II. The NYSE is an auction market. I...






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Which one of the following statements concerning stock exchanges is correct?






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Dealer markets:






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Which one of the following statements is correct concerning the NYSE?






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Which of the following statements concerning NASDAQ are correct? I. Most smaller firms are listed on NASDAQ rather than on the NYSE. II. NASDAQ is a...






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You are considering a project that has been assigned a discount rate of 14 percent. If you start the project today, you will incur an initial cost of ...






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Southern Shores is considering a project that has an initial cost today of $12,500. The project has a two-year life with cash inflows of $7,500 a year...






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Western Industrial Products is considering a project with a four-year life and an initial cost of $212,000. The discount rate for the project is 16 pe...






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Dressler Technologies is considering a project with a 3-year life and an initial cost of $85,000. The discount rate for the project is 14.5 percent. T...






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Patience is reviewing a project with projected sales of 4,200 units a year, a cash flow of $28 a unit, and a four-year project life. Assume all operat...






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You own a convertible bond with a face value of $1,000 and a market value of $1,034. The bond can be converted into 14 shares of stock. What is the co...






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You own nine convertible bonds. These bonds have a 7 percent coupon, a $1,000 face value, and mature in 6 years. The bonds are convertible into shares...






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A convertible bond has a face value of $5,000 and a conversion price of $80. The bond has a 6 percent coupon, pays interest semi-annually, and matures...






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A convertible bond has a face value of $1,000 and a conversion price of $12.50. The bond has a 6 percent coupon, pays interest semi-annually, and matu...






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Kurt owns a convertible bond that matures in three years. The bond has a 7.5 percent coupon and pays interest semi-annually. The face value of the bon...






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Lucinda owns a convertible bond that matures in six years. The bond has a 9 percent coupon and pays interest annually. The face value of the bond is $...






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T-bills currently yield 6.3 percent. Stock in Pinta Manufacturing is currently selling for $46 per share. There is no possibility that the stock will ...






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The price of Time Squared Corp. stock will be either $80 or $95 at the end of the year. Call options are available with one year to expiration. T-bill...






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The price of Dimension, Inc. stock will be either $65 or $85 at the end of the year. Call options are available with one year to expiration. T-bills c...






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Rackin Pinion Corporation's assets are currently worth $1,260. In one year, they will be worth either $1,200 of $1,610. The risk-free interest ra...






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Buckeye Industries has a bond issue with a face value of $1,000 that is coming due in one year. The value of Buckeye's assets is currently $1,200...






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A $1,000 convertible debenture has a conversion price for common stock of $85 per share. The common stock is selling at $92 a share. What is the conve...






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A bond with 10 detachable warrants has just been offered for sale at $1,000. The bond matures in 15 years and has an annual coupon of $80. Each warran...






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We are examining a new project. We expect to sell 9,000 units per year at $45 net cash flow apiece for the next 20 years. In other words, the annual o...






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We are examining a new project. We expect to sell 8,000 units per year at $80 net cash flow apiece for the next 15 years. In other words, the annual o...






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Farmer Jones raises several hundred acres of corn and would suffer a significant loss should the price of corn decline at harvest time. Which one of t...






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The value of a stock option is dependent upon the value of the underlying stock. Thus, a stock option is a:






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Farmer Mac owns a large orange grove in Florida. The value of his business is directly related to the price of oranges. Which one of the following is ...






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Farmer Ted planted 200 acres in wheat this year. The weather has been perfect and he expects to harvest a record crop within the next two weeks. At pr...






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For years, your family has operated a business that produces lawn mowers. Over the years, the industry has progressed and new mass production techniqu...






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This morning a cereal maker agreed to pay a farmer $4.40 a bushel for 5,000 bushels of wheat that the farmer will ship to the factory four months from...






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A graph depicting the gains and losses a seller of a forward contract would earn at various market prices is referred to as a:






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By definition, which one of the following contracts is marked to the market on a daily basis?






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Southern Groves raises tangerines. To hedge its risk, the firm trades in the orange futures market. This process is known as:






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The National Bank has an agreement with The Foreign Bank to exchange 500,000 U.S. dollars for 380,000 Euros on the first day of each of the next 3 cal...






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Sue recently purchased a right to buy 100 shares of ABC stock for $27.50 a share if she so chooses at any time within the next four months. Which one ...






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Steve recently sold an option that requires him to purchase 100 shares of Omega stock at $40 a share should the option owner decide to exercise the op...






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Which one of the following statements is correct?






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A strong argument can be made that the collapse of the savings and loan industry began when:






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The breakdown of the Bretton Woods accord caused _____ volatility to increase.






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Which one of the following can a firm do if it effectively manages its financial risks?






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A hedge between which two of the following firms is most apt to reduce each firm's financial risk exposure?






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Which one of the following statements is correct in relation to a firm's short-run financial risk?






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Long-run financial risk:






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By hedging financial risk, a firm can:






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The seller of a forward contract:






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A bakery generally enters into a forward contract in wheat as a: