Corporate Finance Quiz

Which one of the following terms is defined as the management of a firm's long-term investments?

• working capital management

• financial allocation

• agency cost analysis

• capital budgeting

• capital structure

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

• working capital management

• cash management

• cost analysis

• capital budgeting

• capital structure

Which one of the following is defined as a firm's short-term assets and its short-term liabilities?

• working capital

• debt

• investment capital

• net capital

A business owned by a solitary individual who has unlimited liability for its debt is called a:

• corporation.

• sole proprietorship.

• general partnership.

• limited partnership.

• limited liability company.

A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:

• corporation.

• sole proprietorship.

• general partnership.

• limited partnership.

• limited liability company.

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:

• generally partner.

• sole proprietor.

• limited partner.

• corporate shareholder.

• zero partner.

A business created as a distinct legal entity and treated as a legal 'person' is called a:

• corporation.

• sole proprietorship.

• general partnership.

• limited partnership.

• unlimited liability company.

Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

• articles of incorporation

• corporate breakdown

• agency problem

• bylaws

• legal liability

A stakeholder is:

• a person who owns shares of stock.

• any person who has voting rights based on stock ownership of a corporation.

• a person who initially founded a firm and currently has management control over that firm.

• a creditor to whom a firm currently owes money.

• any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.

Which of the following questions are addressed by financial managers?

• I and IV only

• II and III only

• I, II, and III only

• II, III, and IV only

• I, II, III, and IV