FINANCE ASSIGNMENT 1 QUESTIONS AND ANSWERS
1. For corporations, maximizing the value of owner's equity can also be stated as
Answer maximizing the stock price
2. In the United States, which of these financial institutions arrange most primary market
transactions for businesses?
Answer investment banks
3. The practice generally known as double taxation is due to
Answer corporate incomes being taxed at the corporate level, then again at the shareholder
level when corporate profits are paid out as dividends.
4. The overall goal of the financial manager is to
Answer maximize shareholder wealth
5. Which of the following is an example of aligning managers' personal interests with those
of the owners?
Answer offer the managers an equity stake in the firm
6. Which of the following personal decision IS impacted by finance?
Answer -Borrowing money to purchase cars or homes
-making credit card payments
-making retirement decisions
1. For corporations, maximizing the value of owner's equity can also be stated as
Answer maximizing the stock price
2. In the United States, which of these financial institutions arrange most primary market
transactions for businesses?
Answer investment banks
3. The practice generally known as double taxation is due to
Answer corporate incomes being taxed at the corporate level, then again at the shareholder
level when corporate profits are paid out as dividends.
4. The overall goal of the financial manager is to
Answer maximize shareholder wealth
5. Which of the following is an example of aligning managers' personal interests with those
of the owners?
Answer offer the managers an equity stake in the firm
6. Which of the following personal decision IS impacted by finance?
Answer -Borrowing money to purchase cars or homes
-making credit card payments
-making retirement decisions
