Financial Management Quiz

What is the primary focus of financial management in a corporation?

• Maximizing the market value of the shares of stocks.

• Minimizing the number of shareholders.

• Increasing the number of products sold.

• Reducing the number of employees.

Which of the following best describes the purpose of financial management for both individuals and companies?

• To ensure that cash and other resources are managed properly and not wiped out.

• To increase the number of employees.

• To reduce the price of products.

• To avoid paying taxes.

According to the illustration, what does the market value of shares represent for shareholders?

• The value of the shareholders’ wealth.

• The total number of employees.

• The company’s annual revenue.

• The number of products sold.

If Globe Telecom Inc. shares are actively traded in the Philippine Stock Exchange (PSE), what can happen to the price of the stock and the total market value of the shares?

• They may change every trading day.

• They remain constant throughout the year.

• They only increase and never decrease.

• They are set by the government and do not change.

Which of the following is NOT mentioned as a component of the business finance course described in the module?

• Human resource management techniques.

• Fundamental principles of financial operation.

• Financial analysis and planning.

• Investment and financing decisions.

Based on the illustration, if Globe Telecom Inc. had 132,742,402 shares outstanding and each share closed at P2,200, what was the approximate market value of all shares?

• More than P292 billion.

• Less than P100 million.

• Exactly P1 billion.

• About P50 million.

Which of the following is NOT listed as a unit in the course outline for Business Finance?

• Introduction to Financial Management

• Review of Financial Statements Preparation, Analysis, and Interpretation

• International Marketing Strategies

• Managing Personal Finance

What is the primary objective of management according to the concept of shareholders’ wealth maximization?

• Maximizing company profits

• Maximizing shareholders’ wealth through maximization of stock price

• Minimizing company risks

• Increasing employee satisfaction

Which of the following is a factor that can influence the price of a stock?

• Projected earnings and timeframe for realization

• Number of employees in the company

• The color of the company’s logo

• The location of the company’s headquarters

According to finance literature, why should profit maximization NOT be the overriding objective of management?

• It ignores the importance of marketing

• It does not consider shareholders’ wealth maximization and can expose the company to more risks

• It is illegal in most countries

• It always leads to bankruptcy