FIN370/T Wk 1 Apply Homework Questions With Complete Solutions

FIN370/T Wk 1 Apply Homework Questions With Complete Solutions The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as hhCorrect Answers hhRetained earnings This subarea of finance helps facilitate the capital flows between investors and companies. hhCorrect Answers hhfinancial institutions and markets Which of the following managers would NOT use finance? hhCorrect Answers hhall of these choi ces are correct. As individual legal entities, corporations assume liability for their own debts, so the shareholders hold hhCorrect Answers hhonly limited liability. What is the difference in perspective between finance and accounting? hhCorrect Answers hhtiming From the perspective of control, the best form of business organization is the hhCorrect Answers hhsole proprietorship. Corporate stakeholders include all of the following EXCEPT hhCorrect Answers hhauditors. When determining a form of business organi zation, all of the following are considered EXCEPT hhCorrect Answers hhThe physical location of the business This group is elected by stockholders to oversee management in a corporation. hhCorrect Answers hhBoard of Directors This type of business organizati on is entirely legally independent from its owners. hhCorrect Answers hhpublic corporations The board of directors hhCorrect Answers hhare elected by shareholders Methods to minimize agency problem include all EXCEPT hhCorrect Answers hhallow the CEO to purcha se bonds via an employee bond option plan Restricted stock is hhCorrect Answers hha special type of stock that is not transferable from the current holder to others until specific conditions are satisfied. All of the following are an example of a fiduciary relationship EXCEPT hhCorrect Answers hhthe shareholder elects a board member. A firm has EBIT of $1,000,000 and depreciation expense of $400,000. Fixed charges total $600,000. Interest expense totals $70,000. What is the firm's cash coverage ratio? hhCorrect Answers hh2.33 times Which of the following refers to the amount of debt versus equity a firm has on its balance sheet? hhCorrect Answers hhcapital structure