Test Bank for Foundations of Finance, 10e (Keown/Martin/Petty). All Chapters with Correct Answers

Test Bank for Foundations of Finance, 10e(
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Keown/Martin/Petty) Latest & Updated 20
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, Foundations of Finance, 10e (Keown/Martin/Petty)
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Chapterv1v AnvIntroductionvtovthevFoundationsvofvFinancialvManagement


LearningvObjectivev1.1




1) Financialvmanagementvdealsvwithvthevmaintenancevandvcreationvofveconomicvvaluevorv
wealth.vAnswer:vTRUE

Diff:v1v PagevRef:v3

Keywords:vFinancialvManagementvLearningvObj.:vL.O.v1.1v

AACSB:vReflectivevThinking




2) Eachvfinancialvdecisionvmadevbyvavcorporatevmanagervcanvbevevaluatedvbyvitsvdirectvi
mpactvonvthevcorporation'svstockvprice.

Answer:vFALSEvDiff:v1 PagevRef:v4

Keywords:vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1vAACSB:vReflectivevThinking




3) Thevfundamentalvgoalvofvavbusinessvisvtovmaximizevthevretainedvearningsvavailablevtovthevc
orporation'svshareholders.

Answer:vFALSEvDiff:v1 PagevRef:v3

Keywords:vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1vAACSB:vReflectivevThinking

,4) Shareholdervwealthvmaximizationvmeansvmaximizingvthevpricevofvthevexistingvcommonvs
tock.vAnswer:vTRUE




Diff:v1v PagevRef:v3

Keywords:vShareholdervWealth,vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1v

AACSB:vReflectivevThinking




5) Itvisvimportantvtovevaluatevavcorporatevmanager'svfinancialvdecisionvbyvmeasuringvtheve
ffectvthevdecision

shouldvhavevonvthevcorporation'svstockvpricevifveverythingvelsevwerevheldvconstant.vAnswer:vT
RUE

Diff:v2v PagevRef:v4

Keywords:vGoalvofvthevFirm,vMaximizevShareholdervWealthvLearningvObj.:vL.O.v1.1v

AACSB:vReflectivevThinking




6) Corporatevmanagersvshouldvacceptvinvestmentvprojectsvthatvmaximizevprofitsvinvthevshortvr
unvbecausevofvthevtimevvaluevofvmoney.

Answer:vFALSEvDiff:v2 PagevRef:v4

Keywords:vGoalvofvthevFirm,vProfits,vTimevValuevofvMoneyvLearningvObj.:vL.O.v1.1v

AACSB:vReflectivevThinking

, 7) Thevgoalvofvthevfirm'svfinancialvmanagersvshouldvbevthevmaximizationvofvthevtotalvvaluevofvt
hevfirm'svstock.

Answer:vTRUEvDiff:v1 PagevRef:v3

Keywords:vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1vAACSB:vReflectivevThinking




8) Thevpaymentvofvavdividendvtovcurrentvshareholdersvwillvhavevnovimpactvonvavcorporation'svs
harevpricevbecausevthevcashvpaidvisvnotvavailablevtovfuturevpotentialvshareholdersvwhovmayvwantvtov
buyvthevcorporation'svstock.




Answer:vFALSEvDiff:v1 PagevRef:v4

Keywords:vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1vAACSB:vReflectivevThinking




9) Onevproblemvwithvmaximizationvofvshareholdervwealthvasvavgoalvisvthatvitvignoresvriskvt
akenvbyvthevfirm'svfinancialvdecisions.

Answer:vFALSEvDiff:v1 PagevRef:v4

Keywords:vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1vAACSB:vReflectivevThinking




10) Thevgoalvofvprofitvmaximizationvignoresvthevriskvofvfinancialvdecisions.vAnswer:vFALSE

Diff:v1vPagevRef:v4vKeywords:vGoalvofvthevFirmvLearningvObj.:vL.O.v1.1vAACSB:vReflectivevT
hinking