FIN 306 Exam Questions And Answers With
100% Fully Update
Moving from a future value to a present value is called compounding. - CORRECT - ANSWERS
False
When addressing agency problems in the firm, a high salary is better than stock ownership. -
CORRECT - ANSWERS False
On a balance sheet, Assets = Liabilities + Equity. - CORRECT - ANSWERS True
Managers can use net income to make interest payments to bondholders. - CORRECT -
ANSWERS False
The NASDAQ is an example of a secondary market. - CORRECT - ANSWERS True
If the payment and discount rate are both positive, an ordinary annuity has a lower present
value than an otherwise equivalent annuity due. - CORRECT - ANSWERS True
You computer shareholder wealth as stock price x shares outstanding. - CORRECT - ANSWERS
True
In its IPO in 2019, Zoom received cash from investors in exchange for new shares of stock. -
CORRECT - ANSWERS True
The bondholders are the owners of a firm. - CORRECT - ANSWERS False
The goal of a financial manager is:
, a. Maximize cash flow
b. Maximize shareholder wealth
c. Maximize earnings
d. Maximize revenue - CORRECT - ANSWERS Maximize shareholder wealth
Where do a company's bonds appear on its balance sheet?
a. Short term assets
b. Liabilities
c. Equity
d. Operations - CORRECT - ANSWERS Liabilities
Consider a perpetuity with a positive payment and discount rate. All else equal, what
happens to PV if all payments are shifted forward one year such that the first payment
happens today?
a. PV does not change
b. PV increases
c. PV can either increase or decrease
d. PV decreases - CORRECT - ANSWERS PV increases
If you submit an order through an online broker to purchase 10 shares of Zoom, who would
receive the money you pay for the shares?
a. The previous owner of the shares
b. Zoom
c. Your broker
d. The government - CORRECT - ANSWERS The previous owner of the shares
100% Fully Update
Moving from a future value to a present value is called compounding. - CORRECT - ANSWERS
False
When addressing agency problems in the firm, a high salary is better than stock ownership. -
CORRECT - ANSWERS False
On a balance sheet, Assets = Liabilities + Equity. - CORRECT - ANSWERS True
Managers can use net income to make interest payments to bondholders. - CORRECT -
ANSWERS False
The NASDAQ is an example of a secondary market. - CORRECT - ANSWERS True
If the payment and discount rate are both positive, an ordinary annuity has a lower present
value than an otherwise equivalent annuity due. - CORRECT - ANSWERS True
You computer shareholder wealth as stock price x shares outstanding. - CORRECT - ANSWERS
True
In its IPO in 2019, Zoom received cash from investors in exchange for new shares of stock. -
CORRECT - ANSWERS True
The bondholders are the owners of a firm. - CORRECT - ANSWERS False
The goal of a financial manager is:
, a. Maximize cash flow
b. Maximize shareholder wealth
c. Maximize earnings
d. Maximize revenue - CORRECT - ANSWERS Maximize shareholder wealth
Where do a company's bonds appear on its balance sheet?
a. Short term assets
b. Liabilities
c. Equity
d. Operations - CORRECT - ANSWERS Liabilities
Consider a perpetuity with a positive payment and discount rate. All else equal, what
happens to PV if all payments are shifted forward one year such that the first payment
happens today?
a. PV does not change
b. PV increases
c. PV can either increase or decrease
d. PV decreases - CORRECT - ANSWERS PV increases
If you submit an order through an online broker to purchase 10 shares of Zoom, who would
receive the money you pay for the shares?
a. The previous owner of the shares
b. Zoom
c. Your broker
d. The government - CORRECT - ANSWERS The previous owner of the shares
