FINANCE 301 Exam 2 2025| Questions Solved
100% Correct | Verified Answers
The following are advantages to incorporating a business: - ANSWER A. Easier access to
financial markets to raise capital through the sale of stocks and bonds
B. Limited liability
C. Becoming a legal entity that can have a life in perpetuity
____________________ is elected by, and represents the interests of the shareholders
of the corporation. - ANSWER A board of directors
____________________ are expected to make capital budgeting and other decisions
that are in the best interest of the corporations shareholders. - ANSWER Corporate
managers
_______________________ and _____________________ making are important
attributes for financial managers because they represent the means to the desired end,
to maximize the firm's stock price, which in turn maximizes shareholder wealth. -
ANSWER Sound judgement, effective decision
Initially, most corporations are ________________. They are referred to in this manner
because their stock is held only by a small group of investors. - ANSWER closely held
A _________________ is an example of a financial asset. - ANSWER corporate bond
Know the difference between financial assets and real assets. - ANSWER Reals assets are
assets used to produce goods and services. It is tangible and touchable and has value.
Ex: a trademark, truck, undeveloped land, an experienced hardworking sales force
, Finance assets are the firm finances its investment in real assets by issuing financial
assets to investors. Ex: A share of stock, bank loans, personal IOU, balance in a firms
checking account,
A decision to expand into a new line of products, at a cost of $5 million, would be
considered a __________________________ decision. - ANSWER capital budgeting
decision
When a corporation decides to issue long-term debt in oder to pay for the acquisition of
real assets, it has made a ______________________________ decision. - ANSWER
financing
A manager's compensation plan that offers financial incentives for increases in
_________________________ may create agency problems, because short-term, not
long-term profits become the focus - ANSWER quarterly profitability
__________________________ generate the largest value for the firm's shareholders
and create the greatest sustainable competitive advantage for a corporation. - ANSWER
Ethical strategies
Commercial banks, investment banks, savings and loan associations, mutual savings
banks, credit unions, life insurance companies, hedge funds, mutual funds and pension
funds are examples of _______________________________. - ANSWER Financial
intermediaries
A __________________________ is utilized when securities are initially issued by a
corporation to raise capital. - ANSWER primary market
You can buy silver in a _________________________ market. - ANSWER commodities
100% Correct | Verified Answers
The following are advantages to incorporating a business: - ANSWER A. Easier access to
financial markets to raise capital through the sale of stocks and bonds
B. Limited liability
C. Becoming a legal entity that can have a life in perpetuity
____________________ is elected by, and represents the interests of the shareholders
of the corporation. - ANSWER A board of directors
____________________ are expected to make capital budgeting and other decisions
that are in the best interest of the corporations shareholders. - ANSWER Corporate
managers
_______________________ and _____________________ making are important
attributes for financial managers because they represent the means to the desired end,
to maximize the firm's stock price, which in turn maximizes shareholder wealth. -
ANSWER Sound judgement, effective decision
Initially, most corporations are ________________. They are referred to in this manner
because their stock is held only by a small group of investors. - ANSWER closely held
A _________________ is an example of a financial asset. - ANSWER corporate bond
Know the difference between financial assets and real assets. - ANSWER Reals assets are
assets used to produce goods and services. It is tangible and touchable and has value.
Ex: a trademark, truck, undeveloped land, an experienced hardworking sales force
, Finance assets are the firm finances its investment in real assets by issuing financial
assets to investors. Ex: A share of stock, bank loans, personal IOU, balance in a firms
checking account,
A decision to expand into a new line of products, at a cost of $5 million, would be
considered a __________________________ decision. - ANSWER capital budgeting
decision
When a corporation decides to issue long-term debt in oder to pay for the acquisition of
real assets, it has made a ______________________________ decision. - ANSWER
financing
A manager's compensation plan that offers financial incentives for increases in
_________________________ may create agency problems, because short-term, not
long-term profits become the focus - ANSWER quarterly profitability
__________________________ generate the largest value for the firm's shareholders
and create the greatest sustainable competitive advantage for a corporation. - ANSWER
Ethical strategies
Commercial banks, investment banks, savings and loan associations, mutual savings
banks, credit unions, life insurance companies, hedge funds, mutual funds and pension
funds are examples of _______________________________. - ANSWER Financial
intermediaries
A __________________________ is utilized when securities are initially issued by a
corporation to raise capital. - ANSWER primary market
You can buy silver in a _________________________ market. - ANSWER commodities
