Financial

The goal of the firm should be

• Maximization of shareholder wealth.

• Maximization of profits. 

• Maximization of consumer satisfaction

• Maximization of sales.

“Shareholder wealth" in a firm is represented  by:

• A. the market price per share of the firm's  common stock. 

• B. the number of people employed in the firm.

• C. the book value of the firm's assets less the  book value of its liabilities 

• D. the amount of salary paid to its employees.

The long-run objective of financial  management is to:

• A. maximize the value of the firm's common  stock. 

• maximize earnings per share. 

• maximize return on investment. 

• maximize market share.

Investment decisions are answers to  questions:

• What is the optimal firm size?

• What is the best type of financing? 

  
  

• What is the best financing mix? 

  
  

• What is the best dividend policy?

  
  

Financing decisions are answers to  

questions:

• What is the best dividend policy? 

  
  

• What is the optimal firm size? 

  
  

• What specific assets should be acquired

• What assets should be eliminated?

  
  

A market where new securities are bought  and sold for the first time is:

• Primary Market 

  
  

• Money Market 

  
  

•  Capital Market 

  
  

• Secondary Market

  
  

A market for existing (used) securities rather  than new issues is:

•  Secondary Market 

  
  

• Money Market 

  
  

• Capital Market 

  
  

• Primary Market

  
  

You are about to determine your  

corporation’s taxable income. Which of the  below would not be included as a tax deductible expense?

• Dividend expense 

  
  

• Depreciation expense 

  
  

• Cost of goods sold 

  
  

• Marketing expenses

  
  

Which of the following is not the  

responsibility of financial management?

•  preparation of the firm's accounting  statements 

  
  

•  allocation of funds to current and capital  assets 

  
  

• obtaining the best mix of financing  alternatives 

  
  

• development of an appropriate dividend  policy

  
  

Which of the following items is NOT included in current assets?

•  Bonds. 

  
  

• Accounts receivable. 

  
  

• Inventory. 

  
  

• Cash.