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12 Cards in this Set
- Front
- Back
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What is the liability for a sole proprietorship? |
Unlimited liability which means personal assets can be seized by creditors |
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What is the liability for 50/50 partnership? |
Unlimited liability in a partnership which means creditors can seize personal assets |
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What is the liability for a corporation? |
Limited liability, which guarantees that the investor can not loose more than invested |
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High net cash flows with fixed risk is generally associated with a higher share price True or False |
True |
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The wealth of corporate owners is measured by the share price of the stock True or False |
True |
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A higher Earnings Per Share (EPS) does not necessarily translate into a higher stock price True or False |
True |
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The Profit Maximization goal ignores the timing of returns, does not directly consider cash flows, and ignores risk True or False |
True |
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Is better to declare funds on wealth maximization earlier or later |
Earlier |
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A financial mangers primary activities include making investments and financing decisions True or False |
True |
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Where do investment decisions normally appear? |
Left-hand side of the balance sheet, and financing decisions relate to the items on the right hand side |
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Agency problems arises when managers deviate from the goal of maximization of shareholder wealth by placing their personal goals ahead of the goals of shareholders True or False |
True |
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What is one of the solutions to the agency problem in publicly held corporations |
Stock Options |
