Financial Management Questions Bank
Financial Management Questions bank
Note: these questions could be increase over the time:
Chapter 1: The Role of Financial Management
Top of Form 1
1. "Shareholder wealth" in a firm is represented by: [pic]the number of people employed in the firm. [pic]the book value of the firm's assets less the book value of its liabilities. [pic]the amount of salary paid to its employees. [pic]the market price per share of the firm's common stock.
2. The long-run objective of financial management is to: [pic]maximize earnings per share. [pic]maximize the value of the firm's common stock. [pic]maximize return on investment. [pic]maximize market share.
3. What are the earnings per share (EPS) for a company that earned $100,000 last year in after-tax profits, has 200,000 common shares outstanding and $1.2 million in retained earning at the year end? [pic]$100,000 [pic]$6.00 [pic]$0.50 [pic]$6.50
4. A(n) would be an example of a principal, while a(n) would be an example of an agent. [pic]shareholder; manager [pic]manager; owner [pic]accountant; bondholder [pic]shareholder; bondholder
5. The market price of a share of common stock is determined by: [pic]the board of directors of the firm. [pic]the stock exchange on which the stock is listed. [pic]the president of the company. [pic]Individuals buying and selling the stock.
6. The focal point of financial management in a firm is: [pic]the number and types of products or services provided by the firm. [pic]the minimization of the amount of taxes paid by the firm. [pic]the creation of value for shareholders. [pic]the dollars profits earned by the firm.
7. The decision function of financial management can be broken down into the decisions. [pic]financing and investment [pic]investment, financing, and asset management [pic]financing and dividend [pic]capital budgeting, cash management, and credit management
8. The
Note: these questions could be increase over the time:
Chapter 1: The Role of Financial Management
Top of Form 1
1. "Shareholder wealth" in a firm is represented by: [pic]the number of people employed in the firm. [pic]the book value of the firm's assets less the book value of its liabilities. [pic]the amount of salary paid to its employees. [pic]the market price per share of the firm's common stock.
2. The long-run objective of financial management is to: [pic]maximize earnings per share. [pic]maximize the value of the firm's common stock. [pic]maximize return on investment. [pic]maximize market share.
3. What are the earnings per share (EPS) for a company that earned $100,000 last year in after-tax profits, has 200,000 common shares outstanding and $1.2 million in retained earning at the year end? [pic]$100,000 [pic]$6.00 [pic]$0.50 [pic]$6.50
4. A(n) would be an example of a principal, while a(n) would be an example of an agent. [pic]shareholder; manager [pic]manager; owner [pic]accountant; bondholder [pic]shareholder; bondholder
5. The market price of a share of common stock is determined by: [pic]the board of directors of the firm. [pic]the stock exchange on which the stock is listed. [pic]the president of the company. [pic]Individuals buying and selling the stock.
6. The focal point of financial management in a firm is: [pic]the number and types of products or services provided by the firm. [pic]the minimization of the amount of taxes paid by the firm. [pic]the creation of value for shareholders. [pic]the dollars profits earned by the firm.
7. The decision function of financial management can be broken down into the decisions. [pic]financing and investment [pic]investment, financing, and asset management [pic]financing and dividend [pic]capital budgeting, cash management, and credit management
8. The