Test Bank for Fundamentals of Corporate Finance, 13th Edition 2024 Release by Stephen Ross | Complete Chapters

Test Bank for Fundamentals
g g g g




of Corporate Finance 7th Can
g g g g




adian Edition Ross
g g

, Test Bank for Fundamentals of Corporate Finance 7th Can
g g g g g g g g

adian
Edition Ross Complete 2023
g g g g


1
Student:g

1. Whengevaluatinggagprojectgingwhichgagfirmgmightginvest,gthegsizegbutgnotgthegtiminggofgthegcashgflows
gisgimportant.
True False
2. Ingcapitalgbudgeting,gthegfinancialgmanagergtriesgtogidentifyginvestmentgopportunitiesgthatgaregworthgmo
regtogthegfirmgthangtheygcostgtogacquire.
True False
3. Maximizationgofgthegcurrentgearningsgofgthegfirmgisgthegmainggoalgofgthegfinancialgmanag
er.gTrue False
4. Thegprimaryggoalgofgagfinancialgmanagergshouldgbegtogmaximizegthegvaluegofgsharesgissuedgtogn
ewginvestorsgingthegcorporation.
True False
5. Thegprimaryggoalgofgfinancialgmanagementgisgtogminimizegthegcorporategtaxgliabilit
y.gTrueFalse
6. Whengownersgaregmanagersg(suchgasgingagsolegproprietorship),gagfirmgwillghavegagencygcos
ts.gTrue False
7. IBECgInc.gofgTorontogspendsgapproximatelyg$2gmilliongannuallygtoghiregauditorsgtoggogovergthegfir
m'sgfinancialgstatements.gThisgisgangexamplegofgangindirectgagencygcost.
True False
8. Thegboardgofgdirectorsghasgthegpowergtogactgongbehalfgofgthegshareholdersgtoghiregandgfiregthegoperati
nggmanagementgofgthegfirm.gIngaglegalgsense,gthegdirectorsgareg"principals"gandgthegshareholders
areg"agents"
.gTrue False
9. Thegcorporategofficerggenerallygresponsiblegforgtasksgrelatedgtogtaxgmanagement,gcostgaccountin
g,gfinancialgaccounting,gandgdatagprocessinggisgthe:
A. CorporategController.
B. VicegPresidentgofgOperations.
C. Director.
D. CorporategTreasurer.
E. ChairmangofgthegBoard.
10. Thegcorporategofficerggenerallygresponsiblegforgtasksgrelatedgtogcashgandgcreditgmanagement,gfinanci
algplanning,gandgcapitalgexpendituresgisgthe:
A. ChairmangofgthegBoard.
B. VicegPresidentgofgOperations.
C. CorporategController.
D. CorporategTreasurer.
E. Director.
11. Thegprocessgofgplanninggandgmanaginggagfirm'sglong-termginvestmentsgisgcalled:
A. Capitalgstructure.
B. Workinggcapitalgmanagement.
C. Agencygcostganalysis.
D. Capitalgbudgeting.
E. Financialgdepreciation.

, Test Bank for Fundamentals of Corporate Finance 7th Can
g g g g g g g g


adian Edition Ross gg g



12. Thegmixturegofgdebtgandgequitygusedgbygthegfirmgtogfinancegitsgoperationsgisgcalled:
A. capitalgstructure.
B. financialgdepreciation.
C. workinggcapitalgmanagement.
D. capitalgbudgeting.
E. agencygcostganalysis.
13. Thegmanagementgofgthegfirm'sgshort-termgassetsgandgliabilitiesgisgcalled:
A. Financialgdepreciation.
B. Capitalgstructure.
C. Capitalgbudgeting.
D. Workinggcapitalgmanagement.
E. Agencygcostganalysis.
14. Agbusinessgownedgbygagsinglegindividualgisgcalledga(n):
A. Partnership.
B. Closedgreceivership.
C. Solegproprietorship.
D. Corporation.
E. Opengstructure.
15. Agbusinessgformedgbygtwogorgmoregindividualsgorgentitiesgisgcalledga(n):
A. Opengstructure.
B. Solegproprietorship.
C. Corporation.
D. Partnership.
E. Closedgreceivership.
16. Thegdivisiongofgprofitsgandglossesgbetweengthegmembersgofgagpartnershipgisgformalizedgingthe:
A. Indenturegcontract.
B. Indemnitygclause.
C. Partnershipgagreement.
D. Statementgofgpurpose.
E. Groupgcharter.
17. Agbusinessgcreatedgasgagdistinctglegalgentitygcomposedgofgonegorgmoregindividualsgorgentitiesgisgcall
edga(n):
A. Solegproprietorship.
B. Partnership.
C. Closedgreceivership.
D. Corporation.
E. Opengstructure.
18. Thegdocumentgthatglegallygestablishesgdomicilegforgagcorporationgisgcalledgthe:
A. Bylaws.
B. Partnershipgagreement.
C. Articlesgofgincorporation.
D. Indenturegcontract.
E. Amendedghomesteadgfiling.
19. Thegrulesgbygwhichgcorporationsggoverngthemselvesgaregcalled:
A. Indenturegprovisions.
B. Partnershipgagreements.
C. Indemnitygprovisions.
D. Bylaws.
E. Articlesgofgincorporation.

, Test Bank for Fundamentals of Corporate Finance 7th Can
g g g g g g g g


adian Edition Ross gg g



20. Thegprimaryggoalgofgfinancialgmanagementgisgto:
A. Maintaingsteadygearningsggrowth.
B. Maximizegcurrentgsales.
C. Minimizegoperationalgcosts.
D. Maximizegthegcurrentgvaluegpergsharegofgthegexistinggstock.
E. Avoidgfinancialgdistress.
21. Thegpossibilitygofgconflictgofginterestgbetweengthegstockholdersgandgmanagementgofgthegfirmgisgcalled:
A. Thegshareholders'gconundrum.
B. Thegagencygproblem.
C. Corporategbreakdown.
D. Legalgliability.
E. Corporategactivism.
22. Agencygcostsgare:
A. Thegcostsgthatgresultgfromgdefaultgandgbankruptcygofgthegfirm.
B. Thegtotalginterestgpaidgtogcreditorsgovergtheglifetimegofgthegfirm.
C. Thegtotalgdividendsgpaidgtogshareholdersgovergtheglifetimegofgthegfirm.
D. Thegcostsgofgthegconflictgofginterestgbetweengstockholdersgandgmanagement.
E. Corporategincomegsubjectgtogdoublegtaxation.
23. Agstakeholdergis:
A. Agproxygvotegmadegatgagshareholders'gmeeting.
B. Givengtogeachgstockholdergwhengtheygfirstgpurchasegtheirgstock.
C. Agfoundinggstockholdergofgthegfirm.
D. Angoriginalgcreditorgofgthegfirm.
E. Agpersongorgentitygincludinggagstockholdergorgcreditor,gwhogpotentiallyghasgagclaimgongthegcashgflowsg
ofgthegfirm.
24. Thegoriginalgsalegofgsecuritiesgbyggovernmentsgandgcorporationsgoccursgingthe:
A. Dealergmarket.
B. Liquidationgmarket.
C. Primarygmarket.
D. Auctiongmarket.
E. Secondarygmarket.
25. Thegpurchasegandgsalegofgsecuritiesgaftergthegoriginalgissuancegoccursgingthe:
A. Secondarygmarket.
B. Liquidationgmarket.
C. Dealergmarket.
D. Primarygmarket.
E. Auctiongmarket.
26. Agmarketgwheregdealersgbuygandgsellgsecuritiesgforgthemselves,gatgtheirgowngrisk,gisgcalledga(n):
A. Dealergmarket.
B. Auctiongmarket.
C. Primarygmarket.
D. Secondarygmarket.
E. Liquidationgmarket.
27. Agmarketgwheregtradinggtakesgplacegbetweengbuyersgandgsellersgdirectlygisgcalledga(n):
A. Liquidationgmarket.
B. Auctiongmarket.
C. Secondarygmarket.
D. Dealergmarket.
E. Primarygmarket.