Test bank for foundations of finance 10th edition by arthur j keown|Newest edition 100% verified A+

TEST BANK
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,Foundations of Finance, 10e (Keown/Martin/Petty)
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Chapter 1 An Introduction to the Foundations of Financial Management
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Learning Objective 1.1 m m




1) Financial management de: TRUEals with the maintenance and creation of economic value
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or wealth. Answer
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Diff: 1 Page Ref: 3
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Keywords: Financial Management m m




m Learning Obj.: L.O. 1.1 m m m




AACSB: Reflective Thinking m m




2) Each financial decision made by a corporate manager can be evaluated by its direct impact on the
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corporation's stock price.
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Answer: FALSE m




m Diff: 1 Page Ref: 4
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Keywords: Goal of the Firm m m m m




m Learning Obj.: L.O. 1.1 m m m




m AACSB: Reflective m




Thinking
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3) The fundamental goal of a business is to maximize the retained earnings available to the
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corporation's shareholders.
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Answer: FALSE m




m Diff: 1 Page Ref: 3
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Keywords: Goal of the Firm m m m m




m Learning Obj.: L.O. 1.1 m m m




m AACSB: Reflective m




Thinking
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4) Shareholder wealth maximization means maximizing the price of the existing common stock.
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m Answer: TRUE m




Diff: 1 Page Ref: 3
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, Keywords: Shareholder Wealth, Goal of the Firm
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m Learning Obj.: L.O. 1.1
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AACSB: Reflective Thinking
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5) It is important to evaluate a corporate manager's financial decision by measuring the effect the decision
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should have on the corporation's stock price if everything else were held constant.
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m Answer: TRUE m




Diff: 2 Page Ref: 4
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Keywords: Goal of the Firm, Maximize Shareholder Wealth
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m Learning Obj.: L.O. 1.1
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AACSB: Reflective Thinking
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m angelinas