FIN 3403 EXAM 1 QUESTIONS WITH CORRECT
ANSWERS
Goal of the firm - CORRECT ANSWER✔✔-maximise shareholder wealth
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Sole proprietorship - CORRECT ANSWER✔✔-business owned by a single
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individual
General partnership - CORRECT ANSWER✔✔-all partners are fully liable for the
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indebtness incurred by the partnership
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limited partnership - CORRECT ANSWER✔✔-one or more of the partners has
| | | | | | | | | | |
limited liability, restricted to the amount of capital he or she invests in the
| | | | | | | | | | | | | |
partnership
corporation - CORRECT ANSWER✔✔-an entity that legally functions separate and
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apart from its owners
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S corporation - CORRECT ANSWER✔✔-corporation that because of special
| | | | | | | | |
qualifications is taxed as though it were a partnership
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Limited liability company - CORRECT ANSWER✔✔-a cross between a partnership
| | | | | | | | | |
and a corporation under which the owners retain limited liability but the
| | | | | | | | | | | |
company is run and taxed like a partnership
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, public offering - CORRECT ANSWER✔✔-a security offering where all investors
| | | | | | | | | |
have the opportunity to acquire a portion of the financial claims being sold
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private placement - CORRECT ANSWER✔✔-a security offering limited to a small
| | | | | | | | | | |
number of potential investors| | |
venture capitalist - CORRECT ANSWER✔✔-an investment firm that provides
| | | | | | | | |
money to business start ups
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primary market - CORRECT ANSWER✔✔-market in which securities are offered
| | | | | | | | | |
for the first time for sale to potential investors
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secondary market - CORRECT ANSWER✔✔-market in which currently outstanding
| | | | | | | |
securities are traded
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Initial public offering - CORRECT ANSWER✔✔-the first time a company issues
| | | | | | | | | | |
stock to the public
| | |
seasoned equity offering - CORRECT ANSWER✔✔-the sale of additional stock by a
| | | | | | | | | | |
company whose shares are already publicly traded
| | | | | | |
money market - CORRECT ANSWER✔✔-all institutions and procedures that
| | | | | | | | |
facilitate transacations for short term instruments issued by borrowers with very
| | | | | | | | | | |
high credit ratings
| |
ANSWERS
Goal of the firm - CORRECT ANSWER✔✔-maximise shareholder wealth
| | | | | | | |
Sole proprietorship - CORRECT ANSWER✔✔-business owned by a single
| | | | | | | | |
individual
General partnership - CORRECT ANSWER✔✔-all partners are fully liable for the
| | | | | | | | | | |
indebtness incurred by the partnership
| | | |
limited partnership - CORRECT ANSWER✔✔-one or more of the partners has
| | | | | | | | | | |
limited liability, restricted to the amount of capital he or she invests in the
| | | | | | | | | | | | | |
partnership
corporation - CORRECT ANSWER✔✔-an entity that legally functions separate and
| | | | | | | | | |
apart from its owners
| | |
S corporation - CORRECT ANSWER✔✔-corporation that because of special
| | | | | | | | |
qualifications is taxed as though it were a partnership
| | | | | | | |
Limited liability company - CORRECT ANSWER✔✔-a cross between a partnership
| | | | | | | | | |
and a corporation under which the owners retain limited liability but the
| | | | | | | | | | | |
company is run and taxed like a partnership
| | | | | | |
, public offering - CORRECT ANSWER✔✔-a security offering where all investors
| | | | | | | | | |
have the opportunity to acquire a portion of the financial claims being sold
| | | | | | | | | | | |
private placement - CORRECT ANSWER✔✔-a security offering limited to a small
| | | | | | | | | | |
number of potential investors| | |
venture capitalist - CORRECT ANSWER✔✔-an investment firm that provides
| | | | | | | | |
money to business start ups
| | | |
primary market - CORRECT ANSWER✔✔-market in which securities are offered
| | | | | | | | | |
for the first time for sale to potential investors
| | | | | | | |
secondary market - CORRECT ANSWER✔✔-market in which currently outstanding
| | | | | | | |
securities are traded
| | |
Initial public offering - CORRECT ANSWER✔✔-the first time a company issues
| | | | | | | | | | |
stock to the public
| | |
seasoned equity offering - CORRECT ANSWER✔✔-the sale of additional stock by a
| | | | | | | | | | |
company whose shares are already publicly traded
| | | | | | |
money market - CORRECT ANSWER✔✔-all institutions and procedures that
| | | | | | | | |
facilitate transacations for short term instruments issued by borrowers with very
| | | | | | | | | | |
high credit ratings
| |
