Chapter 1 - FM function

Question 1

Financial management definition

Answer 1

The acquisition and deployment of financial resources to achieve key objectives

Question 2

TSR formula

Answer 2

(Dividend paid + change in share price) / share price at start of period

Question 3

What is the financing decision?

Answer 3

Deciding the best way in which to raise finance

Question 4

Agency theory meaning

Answer 4

Managers goals may not be aligned with owners

Question 5

Should managers incentives be based on profits or performance?

Answer 5

Performance