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Which of the following questions should be considered when developing a corporation’s financial plan? I. How much net working capital will be needed? II. Will additional fixed assets be required? III. Will dividends be paid to shareholders? IV. How much new debt must be obtained?

What is the primary goal of corporate finance? a) To maximize revenue b) To maximize shareholder wealth c) To minimize costs d) To maximize market share

TOPIC: Introduction to Financial Management  1. Which of the following can be accepted as main points to note when it comes to a company's financial objective? O It is generally accepted that the main financial objective of a company should be to maximize (or at least increase) shareholder wealth. O There are practical difficulties in selecting a suitable measurement for growth in shareholder wealth. Financial targets such as profit maximization and growth in EPS might be used, but no financial target on its own is ideal. O Financial performance is therefore assessed in a variety of ways: by the actual or expected increase in the share price, growth in profits, growth in EPS, and so on.  2. Which of the following statement/s depicts agency relationships and conflicts?  I. The owners expect the agents to act in the best interests of the owners. Ideally, the 'contract' between the owners and the managers should ensure that the managers always act in the best interests of the…

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Which two situations would tend to cause a company to have more debt in its capital structure?a) Tangible assets to serve as collateralb) Most expenses are for employee compensationc) High levels of unearned revenued) Most expenses are for research and developmente) Stable operating cash flows

What is the primary goal of financial management in a corporation? a) Maximizing shareholder wealth b) Minimizing operational costs c) Increasing market share d) Maintaining stable employment

If the management of a company would like to improve the company's return on equity, what should the management of the company do?

In business finance the generally accepted corporate objective is: Group of answer choices maximization of market share. maximization of shareholders’ wealth maximization of capital employed. maximization of profit.

What are the key factors a company should consider when determining its optimal capital structure, and how do these considerations impact major corporations such as Amazon, Coca-Cola, and Facebook (Meta) in terms of financial risk, operational flexibility, and long-term growth? How does the balance between debt and equity affect these companies' strategic decisions, market value, and overall cost of capital? What role do external factors like market conditions, interest rates, and tax regulations play in shaping their capital structure, and how do industry-specific dynamics influence their financial strategies? Additionally, how do companies ensure that their capital structure decisions align with shareholder interests, and what are the potential trade-offs they face between maintaining financial stability and pursuing aggressive growth strategies?

1. Dividend policy and free cash flow Company management, especially in established corporations, will formulate a policy that is often called a distribution policy or a payout policy. This policy specifies what management intends to do with the company’s profits and any free cash flow (FCF) generated by the firm. The objective is to create a distribution policy that increases the value of the firm and maximizes the wealth of the firm’s shareholders.   Which of the following factors affects management’s decisions regarding a firm’s distribution policy? Check all that apply.   -The level of debt and interest payments   -The level of cash distributions   -The form of payment to shareholders   -The stability of payments to shareholders     Management can make any form of distribution to the firm’s shareholders using the company’s free cash flow (FCF). The underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF…

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What is the primary purpose of computing the cost of capital? a. To determine the market value of the company's shares b. To assess the company's liquidity position c. To evaluate the profitability of investment projects d. To compare the company's performance with industry peers

What is the purpose of financial leverage in finance? a) To increase the company's liquidity b) To reduce the company's risk c) To increase the company's profitability d) To magnify the company's returns and risks

Which of the following theories is supported by the argument that shareholders can transform a company dividend policy into a different policy by means of investors buying and selling on their own account? a. dividend irrelevance theory b. "bird-in-the-hand" theory C. residual distribution model d. tax preference theory

The following are some of the factors that influence the market price of a corporation: I.  Industry prospects where the company operates II. Dividend declaration III. Management competency in terms of operating efficiency of the company IV. Profitability and good liquidity of the business Which of the above are external factors uncontrollable by the management?   II and III   None of the above   II, III, and IV   I and IV

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Which of the following is the main goal of corporate financial managers? O A. Maximizing sales. B. Maximizing profits. C. Maximizing market share. D. Maximizing the price per share of the common stock.

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