Bus Finance Flashcards

1
Q

This is the set of laws, policies, incentives, and monitors designed to handle the issues arising from the separation of ownership and control.

A

corporate governance

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2
Q

This subarea of finance looks at firm decisions in acquiring and utilizing cash received from investors or from retained earnings.

A

financial management

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3
Q

The portion of a company’s profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as

A

retained earnings.

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4
Q

Nonwage compensation that might actually enhance owner value, in that such items may boost managers’ productivity.

A

perks or perquisites

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5
Q

Outside parties that monitor the firm include all of the following EXCEPT

A

the New York Stock Exchange.

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6
Q

Which of these does NOT act as a monitor of how the firm is being run outside the firm?

A

members of the board of directors

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7
Q

An employee stock option plan is

A

a way to align the interests of employees with those of the owners.

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8
Q

The board of directors

A

are elected by shareholders.

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9
Q

An angel investor differs from a venture capitalist because of the

A

size of investment.

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10
Q

All of the following are advantages to organizing as a corporation EXCEPT

A

double taxation.

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11
Q

Which of the following is the firm’s highest-level financial manager?

A

chief financial officer

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12
Q

Individuals who provide small amounts of capital and expert business advice to small firms in exchange for an ownership stake in the firm are referred to as

A

angel investors.

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13
Q

Which of the following is considered a hybrid organization?

A

S corporation
limited liability company
limited liability partnership
limited partnership
all of these choices are correct.

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14
Q

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship, which of these must happen?

A

Both the business must be re formed as a partnership and the owner must give up some control.

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15
Q

These individuals examine a firm’s financial strength for its debt holders.

A

credit analysts

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16
Q

From a taxation perspective, the form of business organization with the highest business level taxes is the

A

corporation.

17
Q

This is a general term for securities like stocks, bonds, and other assets that represent ownership in a cash flow.

A

financial asset

18
Q

Restricted stock is

A

a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied.

19
Q

All of the following are an example of a fiduciary relationship EXCEPT

A

the shareholder elects a board member.

20
Q

Which of the following can create ethical dilemmas between corporate managers and stockholders?

A

agency relationship

21
Q

This subarea of finance is important for adapting to the global economy.

A

international finance

22
Q

These individuals follow a firm, conduct their own evaluations of the company’s business activities, and report to the investment community.

A

investment analysts

23
Q

Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?

A

dividends

24
Q

Which of the following is NOT a function of the board of directors?

A

provide reports to the auditors

25
Q

Which of the following is not an impact of the slowdown occurring in China’s economy?

A

money going out of Manhattan, New York