Corporate Finance Quiz

What is the primary goal of corporate finance?

• Increase market share

• Minimize costs

• Maximize shareholder wealth

• Maximize profit

Which function involves raising capital from shareholders or creditors?

• Capital Budgeting

• Financial Management

• External Financing

• Risk Management

What is capital budgeting primarily concerned with?

• Raising equity capital

• Corporate governance

• Selecting investment projects

• Managing cash flows

Which of the following is a type of debt capital?

• Bonds

• Preferred stock

• Common stock

• Retained earnings

What is the role of financial intermediaries?

• To manage corporate governance

• To raise capital and lend it

• To conduct market research

• To issue stocks

What is a key characteristic of a corporation?

• Taxed as personal income

• Limited liability for investors

• Easy to set up

• Unlimited life

What do agency costs in corporate finance refer to?

• Costs of managing cash flows

• Costs of raising capital

• Costs of compliance with regulations

• Costs arising from conflicts between owners and managers

Which of the following is NOT a dimension of corporate governance?

• Compensation packages

• Auditors

• Boards of directors

• Market competition

What is the focus of modern risk management?

• Maximizing profits

• Minimizing costs

• Managing exposures to various risks

• Increasing market share

What does the statement of cash flows reconcile?

• Operating, investment, and financing cash flows

• Assets and liabilities

• Income and expenses

• Retained earnings and dividends