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13 Cards in this Set
- Front
- Back
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As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
True False |
True
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Businesses will increasingly rely on B2B Internet applications to speed up the cash flows through their firms.
True False |
True
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Financial markets exist as a vast global network of individuals and financial institutions that may be lenders, borrowers, or owners of public companies worldwide.
True False |
True
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Which of the following did not contribute to the financial crisis?
a. The takeover of JPMorgan Chase by Bear Sterns b. The change from mark-to-market accounting to c. Solid credit ratings from the ratings agencies c. Mark this response if all of the above contributed to the financial crisis The extension of credit to high-risk borrowers |
A
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Professor Merton Miller received the Nobel prize in economics for his work on
a. working capital management. b. dividend policy. c. capital structure theory. d. investment theory. |
C
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Professors Harry Markowitz and William Sharpe received their Nobel prize in economics for their contributions to the
a. theories of working capital management. b. theories of international capital budgeting. c. theories of risk-return and portfolio theory. d. options pricing model. |
C
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Many companies such as Tyco, Enron, and WorldCom that suffered financial distress in the late 1990s and early 2000s,
a. committed fraud. b. had failed corporate governance oversight. c. went bankrupt. d. all of these are true. |
D
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Which of the following is not a true statement about the goal of maximizing shareholder wealth?
a. It takes into account the timing of cash-flows. b. It is a short-run point of view which takes risk into account. c. It considers risk as a factor. d. None of these |
B
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Capital markets do not include which of the following securities?
a. Common stock b. Commercial paper c. Preferred stock d. Government bonds |
B
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A corporate buy-back, or the repurchasing of shares, is
a. an example of balance sheet restructuring. b. an excellent source of profits when the firm's stock is over-priced. c. a method of reducing the debt-to-equity ratio. d. all of these. |
A
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Increased productivity due to technology has
a. made it cheaper (in terms of interest costs) for firms to borrow money. b. created larger asset values on the firm's historical balance sheet. c. helped to keep corporate costs in check. d. increased corporations' reliance on debt for capital expansion needs. |
C
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The entity that is responsible for establishing the allocation and cost of capital is
a. investors b. customers c. the corporation d. the economy |
A
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Regarding risk levels, financial managers should
a. avoid higher risk projects because they destroy value b. focus primarily on market fluctuations c. pursue higher risk projects because they increase value d. evaluate investor's desire for risk |
D
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