Tuesday Mor 2 rd

1. Corporate finance does not discuss which of the following?

• Agency problem

• Investment decisions

• Moral hazard

• All of them are correct

2. Building factories and machines are decisions that belong to?

• Financing decisions

• Assets management decisions

• All of them are correct

• All of them are wrong

3. Which of the following is not an objective of corporate financial management?

• Maximize firm’s value

• Maximize firm's earning

• All of them are correct

• All of them are wrong

4. Which of the following is affected by interest expense?

• EBITDA

• EBIT

• EBT

• All of them are correct

5. The cost of corporate income tax is not affected by which of the following indicators?

• EBIT

• EBITDA

• EBT

• All of them are wrong

6. Which of the following formulas is correct?

• EAT = (EBIT-I)*(1-t)

• EAT = EBT - Tax expenses

• All of them are correct

• All of them are wrong

7. Which of the following indicator is the creditor most interested in?

• EBIT

• EBT

• EAT

• EPS

8. Which of the following activities are investment decision of an enterprise?

• Buy long-term securities

• Issuance of common stocks

• Inventory management

• All of them are correct

9. Which of the following costs can be used as a tax shield?

• Administrative Expenses

• Selling expenses

• Interest costs

• All of them are correct

10. DPS (Dividend per share) and EPS (Earning per share) are different when

• The firm pays dividends in share

• The firm retains earning after tax

• The firm does not retain earning after tax

• Not enough information to conclude