Ch1 Assignment

A  The CEO of the firm

B  A company engineer

C  A stockholder holding 10% or more of any class of voting stock

D  The board of directors

A  none of these

B  the managerial labor market disciplining managers.

C  the board of directors affecting the prospects of a manager.

D  the market for corporate control.

A  An example of a primary market transaction would be inheriting 1000 shares of GE from your grandfather.

B  Capital market instruments include both long-term debt and common stocks.

C  Money market instruments are illiquid and have high default risk.

D  If your uncle in New York sold 100 shares of Apple through his broker to an investor in New York, this would be a primary market transaction.

A  to take risk.

B  none of these

C  to make deposits.

D  to hedge risk.

A  the stock market.

B  the money market.

C  the auction market.

D  the bond market.

A  a secondary market transaction.

B  none of these

C  a futures market transaction.

D  a primary market transaction.

A  Secondary

B  Primary

A  Primary

B  Secondary

A  Primary

B  Secondary

A  Corporation

B  Both Sole proprietorship and General partnership

C  Sole proprietorship

D  General partnership

A  True

B  False

A  difference between current assets and current liabilities.

B  difference between shareholders’ equity and long-term debt.

C  difference between total assets and current assets.

D  difference between total assets and total liabilities.

A  limited liability of owners.

B  tax exemption of dividends.

C  easiness to start.

D  flow-through taxation.

A  Providing lunch for the employees.

B  Investment in Land & Buildings.

C  Hiring external auditors to certify accounting statements despite having internal auditors.

D  Excessive perks.

A  having managers report to the board of directors.

B  designing an effective compensation package.

C  instituting severe penalties for bad decisions.

D  hiring outside monitors to keep track of the managers’ decisions.

A  All of these

B  A corporation’s board of directors

C  A chairman

D  A CEO

A  None of these

B  management is separate from ownership.

C  managers know how to manage the firm better than stockholders.

D  stockholders have unreasonable expectations about managerial performance.

A  Profit maximization

B  Stockholders’ wealth maximization

C  Revenue maximization

D  Tax minimization

A  Partnership

B  Limited liability partnership

C  Sole proprietorship

D  Corporation

A  Private corporation

B  Partnership

C  Public corporation

D  Sole proprietorship

A  Partnership

B  Sole proprietorship

C  Both Sole proprietorship and Partnership

D  Corporation

A  Expects to receive interest.

B  Expects to receive a capital gain on their investment.

C  Expects to receive dividends.

D  Expects to have rights as defined in the corporation’s charter and bylaws.