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Multiple Choice Corporate Finance

In: Business and Management

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CHAPTER 1 The correct answer for each question is indicated by a . | | | | 1 | INCORRECT | | A secondary market transaction can occur in either a dealer market or an auction market. | | | | | A) | True | | | | | | B) | False | | | | Feedback: True | | | | 2 | CORRECT | | Control of a firm ultimately rests with the stockholders. | | | | | A) | True | | | | | | B) | False | | | | Feedback: True | | | | 3 | INCORRECT | | It is generally easier to form a sole proprietorship than it is to form a corporation. | | | | | A) | True | | | | | | B) | False | | | | Feedback: True | | | | 4 | CORRECT | | One advantage of the corporate form of organization is that you can buy shares in a corporation such as Wal-Mart without worrying about being held personally liable for the corporation's liabilities. | | | | | A) | True | | | | | | B) | False | | | | Feedback: True | | | | 5 | INCORRECT | | A financial manager must be concerned with three basic areas: Capital budgeting, capital structure, and working capital. | | | | | A) | True | | | | | | B) | False | | | | Feedback: True | | | | 6 | INCORRECT | | Which of the following responses best completes the following: The duties of a working capital manager include | | | | | A) | Deciding how to raise the money required to fund a project | | | | | | B) | Choosing how much inventory a firm should invest in | | | | | | C) | Deciding the amount of dividends a firm should pay out | | | | | | D) | Deciding which projects a firm should undertake | | | | | | E) | Deciding what fixed assets to purchase | | | | Feedback: Choosing how much inventory a firm should invest in |…...

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