FM 313 CHAP 1
Financial Management, Part 1
(University of Cebu)
,Part 1: Multiple Choice (Items 1–20)
1.
What is the generally accepted primary
goal of a company's finance manager?
A. Profit maximization
B. Expense minimization
C. *Stockholders' wealth maximization
D. Asset expansion
2.
Financial management is primarily concerned
with which of the following activities
regarding a company's funds?
A. Recording, summarizing, and reporting
B. *Raising, allocating, and controlling
C. Auditing, verifying, and checking
D. Bookkeeping, documentation, and filing
3.
Which of the following describes the
situation where the actual market price of
a stock is lower than its estimated intrinsic
value?
A. Overvalued
, B. *Undervalued
C. In equilibrium
D. Diluted
4.
Why is profit maximization often criticized as
the primary objective of a business?
A. It is too difficult to calculate.
B. *It ignores risks, uncertainties, and
the timing of returns.
C. It focuses too heavily on long-term value.
D. It requires too much corporate
social responsibility.
5.
Which type of decision is considered the
most important of the three major finance
decisions when it comes to value
creation?
A. *Investment decision
B. Financing decision
C. Dividend policy decision
D. Operational decision
6.
The combination of long-term liabilities and
equity that finances a company’s resources
Financial Management, Part 1
(University of Cebu)
,Part 1: Multiple Choice (Items 1–20)
1.
What is the generally accepted primary
goal of a company's finance manager?
A. Profit maximization
B. Expense minimization
C. *Stockholders' wealth maximization
D. Asset expansion
2.
Financial management is primarily concerned
with which of the following activities
regarding a company's funds?
A. Recording, summarizing, and reporting
B. *Raising, allocating, and controlling
C. Auditing, verifying, and checking
D. Bookkeeping, documentation, and filing
3.
Which of the following describes the
situation where the actual market price of
a stock is lower than its estimated intrinsic
value?
A. Overvalued
, B. *Undervalued
C. In equilibrium
D. Diluted
4.
Why is profit maximization often criticized as
the primary objective of a business?
A. It is too difficult to calculate.
B. *It ignores risks, uncertainties, and
the timing of returns.
C. It focuses too heavily on long-term value.
D. It requires too much corporate
social responsibility.
5.
Which type of decision is considered the
most important of the three major finance
decisions when it comes to value
creation?
A. *Investment decision
B. Financing decision
C. Dividend policy decision
D. Operational decision
6.
The combination of long-term liabilities and
equity that finances a company’s resources
