Finance 3000-Quiz/Chpt 1 – Flashcards
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Dividends
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Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?
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Investments
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This subarea of finance involves methods and techniques to make appropriate decisions about what kinds of securities to own, which firms' securities to buy, and how to be paid back in the form that the investor wishes.
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Financial Management
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This subarea of finance looks at firm decisions in acquiring and utilizing cash received from investors or from retained earnings.
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Financial management involves decisions about which of the following:
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-Which projects to fund -How to minimize taxation -What type of capital should be raised (All of these)
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Financial Institutions and Markets
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This subarea of finance helps facilitate the capital flows between investors and companies.
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International Finance
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This subarea of finance is important for adapting to the global economy.
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When determining a form of business organization, all of the following are considered EXCEPT:
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Who owns the firm. What are the owners' risks. What are the tax ramifications. ---The physical location of the business.---
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Maximizing the stock price
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For corporations, maximizing the value of owner's equity can also be stated as
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Maximizing Shareholder Value
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This should be the primary objective of a firm as it may actually be the most beneficial for society in the long run.
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Board of Directors
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This group is elected by stockholders to oversee management in a corporation.
