FIN 801 - TMU FINAL TEST 2026
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
◍ Goal of corporation.
Answer: Maximize shareholder value/wealth
◍ Fed Dual Mandate.
Answer: Stabilize the economy and mediate smooth financial market
transactions + promote full employment
◍ Equation for yield.
Answer: Y = R (+-) D (+-) L (+-) TS (+-) C (+-) RRateDefault risk Liquidity
Tax status Compounding Regulation
◍ How to manage everyday financial activities of the firm.
Answer: Investing
◍ Shareholders.
Answer: Corporation
◍ Commodities.
Answer: Orders for durable goods in the future- eggs, milk, beef
◍ Limit order.
Answer: a request to buy or sell a stock at a specified price
◍ Current value of future CFs =.
Answer: PV of liability
◍ Salary tied to value added or stock.
Answer: Incentive compensation
◍ All/Unlimited liabitilies.
, Answer: Sole proprietorship
◍ (Debt and Equity) ownership.
Answer: No ownership interest
◍ Preferred stocks.
Answer: Dividends are NOT guaranteed- converted to common stock at
some point- disadvantage to company is that dividends are not deductible
◍ BAUER Financial Rating.
Answer: Analyzes UBPR's, scale of 1-5 (1 is worst, 5 is best)
◍ Easy to sell/transfer ownership.
Answer: Corporation
◍ Private equity.
Answer: Acquire a company with the intention of selling it (takes over the
firm)
◍ Know the markets day of exam.
Answer: !
◍ Money attributed to each shareholders.
Answer: Shareholders equity
◍ Ex. of Agency Relationship.
Answer: Stockholders hire managers to run company
◍ Companies with IPO have to get approval from the ______.
Answer: SEC (securities and exchange commission)
◍ Legally by the SEC alliances to build a firm.
Answer: Corporation
◍ Euro.
Answer: 1999 took over as primary currency in Europe. - made it easier to
trade across countries
◍ 1 owner, personal income tax.
Answer: Sole proprietorship
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
◍ Goal of corporation.
Answer: Maximize shareholder value/wealth
◍ Fed Dual Mandate.
Answer: Stabilize the economy and mediate smooth financial market
transactions + promote full employment
◍ Equation for yield.
Answer: Y = R (+-) D (+-) L (+-) TS (+-) C (+-) RRateDefault risk Liquidity
Tax status Compounding Regulation
◍ How to manage everyday financial activities of the firm.
Answer: Investing
◍ Shareholders.
Answer: Corporation
◍ Commodities.
Answer: Orders for durable goods in the future- eggs, milk, beef
◍ Limit order.
Answer: a request to buy or sell a stock at a specified price
◍ Current value of future CFs =.
Answer: PV of liability
◍ Salary tied to value added or stock.
Answer: Incentive compensation
◍ All/Unlimited liabitilies.
, Answer: Sole proprietorship
◍ (Debt and Equity) ownership.
Answer: No ownership interest
◍ Preferred stocks.
Answer: Dividends are NOT guaranteed- converted to common stock at
some point- disadvantage to company is that dividends are not deductible
◍ BAUER Financial Rating.
Answer: Analyzes UBPR's, scale of 1-5 (1 is worst, 5 is best)
◍ Easy to sell/transfer ownership.
Answer: Corporation
◍ Private equity.
Answer: Acquire a company with the intention of selling it (takes over the
firm)
◍ Know the markets day of exam.
Answer: !
◍ Money attributed to each shareholders.
Answer: Shareholders equity
◍ Ex. of Agency Relationship.
Answer: Stockholders hire managers to run company
◍ Companies with IPO have to get approval from the ______.
Answer: SEC (securities and exchange commission)
◍ Legally by the SEC alliances to build a firm.
Answer: Corporation
◍ Euro.
Answer: 1999 took over as primary currency in Europe. - made it easier to
trade across countries
◍ 1 owner, personal income tax.
Answer: Sole proprietorship
