FINANCIAL MANAGEMENT- CHAPTERS 1-8 EXAM QUESTIONS AND ANSWERS 100% CORRECT!!

Capital Structure - ANSWER The mix of long-term sources of funds used by the firm Corporation - ANSWER A business entity that legally functions separate and apart from its owners Debt - ANSWER Money that has been borrowed and must be repaid. This includes such things as bank loans and bonds Equity - ANSWER The ownership interest in a corporation. It is the stockholders' investment in the firm and the cumulative profits retained in the business up to the date of the balance sheet Financial Market - ANSWER Mechanisms that allow people to easily buy and sell financial claims General Partner - ANSWER A member of a general partnership or a member of a limited partnership who actually runs the business and faces unlimited liability for the firm's debts General Partnership - ANSWER A partnership in which all the partners are fully liable for the indebtness incurred by the partnership Limited Liability Company (LLC) - ANSWER A business organizational form that blends elements of the partnership and corporate forms Limited Partner - ANSWER A member of a limited partnership who is only liable up to the amount invested by that member Limited Partnership - ANSWER A partnership in which one or more of the partners has limited liability that is restricted to the amount of capital he or she invests in the partnership Stockholders - ANSWER The owners of the corporation's stock. The corporation is legally owned by its current set of stockholders, or owners, who elect a board of directors Working Capital Management - ANSWER Management of day-to-day operations and decisions related to working capital and short-term financing Accredited Investor - ANSWER Investor who is permitted to invest in certain types of