2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Unit 8: Final Exam Management
Due at 11:59pm Points 250 Questions 41 Time Limit 120 Minutes
Instructions
Directions
The final exam covers material from week one through week seven.
The exam consists of 40 multiple choice questions and 1 short answer
question. You will have 120 minutes to complete.
The exam is open textbook and open
notes. The exam is not proctored.
Due Date:
Submit the exam by 11:59 pm, on Sunday of Unit 8, CT.
Attempt History
Attempt Time Score
LATEST Attempt 1 95 minutes 220 out of 250 *
* Some questions not yet graded
Correct answers will be available on Oct 8 at 12am.
Score for this quiz: 220 out of 250 *
Submitted Oct 1 at 7:05pm
This attempt took 95 minutes.
Question 1 5..5 pts
The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be
to
1/42
,2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Management
Since it is impossible to measure a stock's intrinsic value, the text states that it is
better for managers to attempt to maximize the current stock price than its
intrinsic value.
Use a well-structured managerial compensation package to reduce conflicts
that may exist between stockholders and managers.
Maximize the firm's expected EPS, which must also maximize the firm's price
per share.
Minimize the firm's risks because most stockholders dislike risk. In turn, this
will maximize the firm's stock price.
Maximize managers' own interests, which are by definition consistent with
maximizing shareholders' wealth.
Question 2 5..5 pts
Relaxant Inc. operates as a partnership. Now the partners have decided to convert the
business into a corporation. Which of the following statements is CORRECT?
Relaxant's shareholders (the ex-partners) will now be exposed to less liability.
The company will probably be subject to fewer regulations and required
disclosures.
Assuming the firm is profitable, none of its income will be subject to federal
income taxes.
2/42
,2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Management
The firm's investors will be exposed to less liability, but they will find it more
difficult to transfer their ownership.
The firm will find it more difficult to raise additional capital to support its growth.
Question 3 5..5 pts
Which of the following could explain why a business might choose to operate as a
corporation rather than as a proprietorship or a partnership?
Corporations generally find it easier to raise large amounts of capital.
Less of a corporation's income is generally subject to federal taxes.
Corporate investors are exposed to unlimited liability.
Corporate shareholders are exposed to unlimited liability, but this factor is
offset by the tax advantages of incorporation.
Corporations generally face fewer regulations.
3/42
, 2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Management
Rationale:
Outsiders thinking about investing in a business are generally not willing to be subjected to
unlimited liability, and they also want to be able to sell their shares should they choose to
do so. Corporations provide these advantages; hence, firms that need large amounts of
capital that must be raised in capital markets generally choose to incorporate.
Rationale:
Outsiders thinking about investing in a business are generally not willing to be subjected to
unlimited liability, and they also want to be able to sell their shares should they choose to
do so. Corporations provide these advantages; hence, firms that need large amounts of
capital that must be raised in capital markets generally choose to incorporate.
Question 4 5..5 pts
Which of the following is an example of a capital market instrument?
Money market mutual funds.
Banker's acceptances.
Preferred stock.
Commercial paper.
U.S. Treasury bills.
Question 5 5..5 pts
4/42
Unit 8: Final Exam Management
Due at 11:59pm Points 250 Questions 41 Time Limit 120 Minutes
Instructions
Directions
The final exam covers material from week one through week seven.
The exam consists of 40 multiple choice questions and 1 short answer
question. You will have 120 minutes to complete.
The exam is open textbook and open
notes. The exam is not proctored.
Due Date:
Submit the exam by 11:59 pm, on Sunday of Unit 8, CT.
Attempt History
Attempt Time Score
LATEST Attempt 1 95 minutes 220 out of 250 *
* Some questions not yet graded
Correct answers will be available on Oct 8 at 12am.
Score for this quiz: 220 out of 250 *
Submitted Oct 1 at 7:05pm
This attempt took 95 minutes.
Question 1 5..5 pts
The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be
to
1/42
,2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Management
Since it is impossible to measure a stock's intrinsic value, the text states that it is
better for managers to attempt to maximize the current stock price than its
intrinsic value.
Use a well-structured managerial compensation package to reduce conflicts
that may exist between stockholders and managers.
Maximize the firm's expected EPS, which must also maximize the firm's price
per share.
Minimize the firm's risks because most stockholders dislike risk. In turn, this
will maximize the firm's stock price.
Maximize managers' own interests, which are by definition consistent with
maximizing shareholders' wealth.
Question 2 5..5 pts
Relaxant Inc. operates as a partnership. Now the partners have decided to convert the
business into a corporation. Which of the following statements is CORRECT?
Relaxant's shareholders (the ex-partners) will now be exposed to less liability.
The company will probably be subject to fewer regulations and required
disclosures.
Assuming the firm is profitable, none of its income will be subject to federal
income taxes.
2/42
,2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Management
The firm's investors will be exposed to less liability, but they will find it more
difficult to transfer their ownership.
The firm will find it more difficult to raise additional capital to support its growth.
Question 3 5..5 pts
Which of the following could explain why a business might choose to operate as a
corporation rather than as a proprietorship or a partnership?
Corporations generally find it easier to raise large amounts of capital.
Less of a corporation's income is generally subject to federal taxes.
Corporate investors are exposed to unlimited liability.
Corporate shareholders are exposed to unlimited liability, but this factor is
offset by the tax advantages of incorporation.
Corporations generally face fewer regulations.
3/42
, 2023 Unit 8: Final Exam: FI360ELF1A2023 Financial
Management
Rationale:
Outsiders thinking about investing in a business are generally not willing to be subjected to
unlimited liability, and they also want to be able to sell their shares should they choose to
do so. Corporations provide these advantages; hence, firms that need large amounts of
capital that must be raised in capital markets generally choose to incorporate.
Rationale:
Outsiders thinking about investing in a business are generally not willing to be subjected to
unlimited liability, and they also want to be able to sell their shares should they choose to
do so. Corporations provide these advantages; hence, firms that need large amounts of
capital that must be raised in capital markets generally choose to incorporate.
Question 4 5..5 pts
Which of the following is an example of a capital market instrument?
Money market mutual funds.
Banker's acceptances.
Preferred stock.
Commercial paper.
U.S. Treasury bills.
Question 5 5..5 pts
4/42
