Chapter One Financial EconomicsThis chapter contains 48 multiple choice questions, 20 short problems and 5 longer problems
Multiple Choice1
The primary goal of corporate management is to ________ shareholder wealth
(a)minimize(b)maximize(c)leverage(d)mitigateAnswer: (b)2
A ________ stock market imposes ________ discipline on managers to take actions to maximize the market value of the firms shares
(a)competitive, strong(b)dispersed, weak(c)mature, no(d)dispersed, strongAnswer: (a)3
The ________ form is especially well suited to the separation of ownership and management of firms because it allows relatively frequent changes in owners by share transfer without affecting the operations of the firm
(a)corporate(b)sole proprietorship(c)partnership(d)householdAnswer: (a)4
________ is anyth