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TEST BANKj


Foundations of Finance
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13th Edition
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TEST BANK!!!
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,FoundationsjofjFinance,j13thj(Keown/Martin/Petty)
Chapterj1j AnjIntroductionjtojthejFoundationsjofjFinancialjManagement


LearningjObjectivej 1.1


1) Financialjmanagementjdealsjwithjthejmaintenancejandjcreationjofjeconomicjvaluejorjwealth.jA
nswer:j TRUE
Diff:j1 PagejRef:j3
Keywords:jFinancialjManagementjLearnin
gjObj.:jL.O.j1.1
AACSB:j ReflectivejThinking


2) Eachjfinancialjdecisionjmadejbyjajcorporatejmanagerjcanjbejevaluatedjbyjitsjdirectjimpactjonjthejco
rporation'sjstockjprice.
Answer:jFALSEjDif
f:j1 PagejRef:j4
Keywords:jGoaljofjthejFirmjL
earningjObj.:jL.O.j1.1jAACS
B:jReflectivejThinking


3) Thejfundamentaljgoaljofjajbusinessjisjtojmaximizejthejretainedjearningsjavailablejtojthejcorporation'sjsh
areholders.
Answer:jFALSEjDif
f:j1 PagejRef:j3
Keywords:jGoaljofjthejFirmjL
earningjObj.:jL.O.j1.1jAACS
B:jReflectivejThinking


4) Shareholderjwealthjmaximizationjmeansjmaximizingjthejpricejofjthejexistingjcommonjstock.jA
nswer:j TRUE
Diff:j1 PagejRef:j3


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,Keywords:jShareholderjWealth,jGoaljofjthejFirmjLearn
ingjObj.:jL.O.j1.1
AACSB:j ReflectivejThinking


5) Itjisjimportantjtojevaluatejajcorporatejmanager'sjfinancialjdecisionjbyjmeasuringjthejeffectjthejdecision
shouldjhavejonjthejcorporation'sjstockjpricejifjeverythingjelsejwerejheldjconstant.jAnsw
er:j TRUE
Diff:j2 PagejRef:j4
Keywords:jGoaljofjthejFirm,jMaximizejShareholderjWealthjLearning
jObj.:jL.O.j1.1


AACSB:j ReflectivejThinking




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, 6) Corporatejmanagersjshouldjacceptjinvestmentjprojectsjthatjmaximizejprofitsjinjthejshortjrunjbecausejof
jthejtimejvaluejofjmoney.


Answer:jFALSEjDif
f:j2 PagejRef:j4
Keywords:jGoaljofjthejFirm,jProfits,jTimejValuejofjMoneyjLearningj
Obj.:jL.O.j1.1
AACSB:j ReflectivejThinking


7) Thejgoaljofjthejfirm'sjfinancialjmanagersjshouldjbejthejmaximizationjofjthejtotaljvaluejofjthejfirm'sjsto
ck.
Answer:j TRUEjDiff
:j1 PagejRef:j3
Keywords:jGoaljofjthejFirmjL
earningjObj.:jL.O.j1.1jAACS
B:jReflectivejThinking


8) Thejpaymentjofjajdividendjtojcurrentjshareholdersjwilljhavejnojimpactjonjajcorporation'sjsharejpricejbe
causejthejcashjpaidjisjnotjavailablejtojfuturejpotentialjshareholdersjwhojmayjwantjtojbuyjthejcorporation'
sjstock.
Answer:jFALSEjDif
f:j1 PagejRef:j4
Keywords:jGoaljofjthejFirmjL
earningjObj.:jL.O.j1.1jAACS
B:jReflectivejThinking


9) Onejproblemjwithjmaximizationjofjshareholderjwealthjasjajgoaljisjthatjitjignoresjriskjtakenjbyjthejfir
m'sjfinancialjdecisions.
Answer:jFALSEjDif
f:j1 PagejRef:j4
Keywords:jGoaljofjthejFirmjL
earningjObj.:jL.O.j1.1jAACS
B:jReflectivejThinking


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Derek Glover, Rosalind Levačić Educational Resource Management
Publisher: 2020 ISBN: 9781787358416 Edition: Unknown

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