maximize the firm's percentage of product market share
B)
maximize the firm's earnings after taxes
C)
maximize the firm's earnings per share
D)
maximize the value of the firm's common stock 1
The price of a share of common stock in a publicly-traded firm represents ________.
14) ______ A)
the board of directors' assessment of the intrinsic value of the firm
B)
the market's evaluation of a firm's present and future performance
C) the book value of the firm's assets less the book value of its liabilities
D)
earnings after tax divided by the number of shares outstanding 1
The best measure of how well management is doing on behalf of its stockholders is ________.
15)
the size of the dividend paid
the common stock price C) the level of total profits
the earnings per share
If the goal of the financial manager were to maximize earnings per share ________.
B) the timing of returns would not matter
C) the company would never pay a dividend
D) all of the above
The market price of a firm's stock ________.
17) ______ A) changes when stockholders become dissatisfied with management performance B) ignores the timing of earnings per share
C) does not change when a company's risk changes
D) is not affected by dividends 1
Stock options, management bonuses, and perquisites are incentives given to the firm's ________.
18) ______ A) "agents."
"principals."
C) "principals and agents."
"stakeholders."
Managers are considered to be "agents" of the firm's owners because ________.
19) ______ A) they have been delegated authority to manage the firm
B) they always act in the best interests of the owners
C) they put shareholder interests above concern for social responsibility
they themselves are usually the largest shareholders in the firm 2
The treasurer of a large corporation is primarily concerned with ________.
20) ______ A)
gathering and reporting information for external bodies, such as the SEC B) investing, financing, and asset management decisions
C) preparing budgets and forecasts
D) gathering and reporting accounting information for internal company use
In a large corporation, the controller is primarily concerned with ________.
21) ______ A)
determining the financing necessary to support assets
B)
cash and credit management
C)
gathering and reporting accounting information
D)
managing and acquiring assets
Incentives such as stock options, bonuses, and perquisites are utilized by the corporation ________.
2
2
to provide an incentive to employees to act in the best interest of shareholders B)
to provide an incentive to allocate resources towards philanthropic endeavors
C)
as a means of over-compensating white-collar workers relative to blue-collar workers
D)
as a means of controlling the actions of competitors
The branch of economic theory which relates the behavior of principals and agents is referred to as ________.
2
The primary difference between the corporation and other historically popular forms of business organizations is
separation between ownership and management
the corporation is unconcerned about the welfare of its employees
In the U.S., the Public Company Accounting Oversight Board (PCAOB) has been given the power to adopt ________ standards for public companies and their auditors as well as investigate and discipline those involved.
What piece of legislation was largely a response to a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others?
The Sarbanes-Oxley Act of 2002 (SOX)
The Corporate Corruption Act of 1992 (CCA)
Exchange Act of 1932 (SEA)
When a firm is meeting the present needs of the firm without compromising the ability of future generations to meet their own needs it is commonly referred to as ________.
The ________ decision begins with the determination of the total amount of assets needed and also involves decisions related to which assets should be reduced, eliminated or replaced.
The ________ decision is concerned about the make-up of the right-hand side of the balance sheet with the dividend policy of the firm being integral as well as the mechanics of physically requiring the necessary funds.
The ________ decision is concerned about charging the manager with an appropriate level of operating responsibility over existing assets to supervise the assets efficiently.
11)
12)
13)