FINC 3610 Final Exam Study Guide | Corporate Finance Dismukes Practice Test

FINC 3610 Final Exam Dismukes NEWEST 2025-2026
COMPLETE QUESTIONS AND CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED
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working capital structure - CORRECT ANSWER- how do we manage the day-to-day
operation

of the firm?



Forms of business organization - CORRECT ANSWER- sole proprietorship, partnership,
corporation



sole proprietorship - CORRECT ANSWER- one single person--> high risk, high reward,
unlimited liability, easy to start-up, taxed as personal income, difficult to transfer
ownership corpo



partnership - CORRECT ANSWER- -general: run the business, making decisions, and
accepting more risk, easy to startup, taxed as personal income

-limited: there for money and investing, limited liability, life limited of that of
owners, equity limited to combined wealth, difficulty transferring ownership

, corporation - CORRECT ANSWER- a business created as a distinct legal entity composed
of one or more individual entities

-separation of ownership and control

-shareholders: anyone who owns stock in company

-directors: voted on by shareholders (proxy vote), ultimate oversight

-managers: run the company



What is the goal of financial management? - CORRECT ANSWER- *maximize shareholder
wealth*

Three questions that corporate finance focused on? - CORRECT ANSWER- 1. capital
budgeting

2. capital structure

3. working capital management



capital budgeting - CORRECT ANSWER- what should we invest in long-term?



capital structure - CORRECT ANSWER- how do we finance those investments?



Agency problem/conflict - CORRECT ANSWER- The possibility of conflict of interest
between the stockholders (the principal) and management (the agent) of a firm



Financial markets and the corporation - CORRECT ANSWER- firm: invest in assets,
current and fixed