Test Bank for Foundations of Finance 13th Edition by Arthur J. Keown. ISBN NO0134417526.pdf

Test Bank for Foundations of Finance, 10e (
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Keown/Martin/Petty) Latest & Updated 2
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Chapter m1 m AnmIntroductionmto mthemFoundationsmofmFinancialmManagement


LearningmObjectivem1.1




1) Financialmmanagement mdealsmwithmthemmaintenancemand mcreationmof meconomicmvaluem
ormwealth.mAnswer:mTRUE

Diff:m1m PagemRef:m3

Keywords:mFinancialmManagement mLearningmObj.:mL.O.m1.1mAACS

B:mReflectivemThinking




2) Eachmfinancialmdecisionmmadembymamcorporatemmanagermcanmbemevaluated mbymitsmdir
ect mimpact monmthemcorporation'smstockmprice.

Answer:mFALSEmDiff:m1 PagemRef:m4

Keywords:mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mAACSB:mReflectivemThinking




3) Themfundamentalmgoalmof mambusinessmismtommaximizemthemretained mearningsmavailablemtomt
hemcorporation'smshareholders.

Answer:mFALSEmDiff:m1 PagemRef:m3

Keywords:mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mAACSB:mReflectivemThinking

,4) Shareholdermwealthmmaximizationmmeansmmaximizingmthempricemof mthemexistingmcomm
onmstock.mAnswer:mTRUE




Diff:m1m PagemRef:m3

Keywords:mShareholdermWealth,mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mA

ACSB:mReflectivemThinking




5) It mismimportant mtomevaluatemamcorporatemmanager'smfinancialmdecisionmbymmeasuringmt
hemeffect mthemdecision

should mhavemonmthemcorporation'smstockmpricemif meverythingmelsemweremheld mconstant.mAnswer
:mTRUE

Diff:m2m PagemRef:m4

Keywords:mGoalmof mthemFirm,mMaximizemShareholdermWealthmLearningmObj.:mL.O.m1.1mAAC

SB:mReflectivemThinking




6) Corporatemmanagersmshould maccept minvestment mprojectsmthat mmaximizemprofitsminmthemsh
ort mrunmbecausemof mthemtimemvaluemof mmoney.

Answer:mFALSEmDiff:m2 PagemRef:m4

Keywords:mGoalmof mthemFirm,mProfits,mTimemValuemof mMoneymLearningmObj.:mL.O.m1.1mAAC

SB:mReflectivemThinking

, 7) Themgoalmof mthemfirm'smfinancialmmanagersmshould mbemthemmaximizationmof mthemtotalmvalue
of mthemfirm'smstock.
m




Answer:mTRUEmDiff:m1 PagemRef:m3

Keywords:mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mAACSB:mReflectivemThinking




8) Thempayment mof mamdividend mtomcurrent mshareholdersmwillmhavemnomimpact monmamcorporatio
n'smsharempricembecausemthemcashmpaid mismnot mavailablemtomfuturempotentialmshareholdersmwhommay
want mtombuymthemcorporation'smstock.
m




Answer:mFALSEmDiff:m1 PagemRef:m4

Keywords:mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mAACSB:mReflectivemThinking




9) Onemproblemmwithmmaximizationmof mshareholdermwealthmasmamgoalmismthat mit mignoresmri
skmtakenmbymthemfirm'smfinancialmdecisions.

Answer:mFALSEmDiff:m1 PagemRef:m4

Keywords:mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mAACSB:mReflectivemThinking




10) Themgoalmof mprofit mmaximizationmignoresmthemriskmof mfinancial mdecisions.mAnswer:mFALSE

Diff:m1mPagemRef:m4mKeywords:mGoalmof mthemFirmmLearningmObj.:mL.O.m1.1mAACSB:mReflectivemThin
king