Term
| Inflation is assumed to be a temporary problem that does not affect financial decisions. |
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Definition
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Term
| There is unlimited liability in a general partnership |
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Definition
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Term
| Dividends paid to corporate stockholders have already been taxed once as corporate income |
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Definition
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Term
| Corporate governance issues have become less important to the financial community during the first decade of the new millennium |
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Definition
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Term
| A major focus of the Sarbanes Oxley Act is to make sure that publicly trades companies accurately present their assets, liabilities and income in their financial statements |
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Definition
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Term
| Timing is not a particularly important consideration in financial decisions |
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Definition
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Term
| Money markets refer to those markets dealing with short term securities having a life of one year or less. |
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Definition
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Term
| The primary market includes the sale of securities by way of initial public offerings |
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Definition
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Term
| New issues are sold in the secondary market |
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Definition
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Term
| Higher return always induces stockholders to invest in a company |
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Definition
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Term
| What is the primary goal of financial management? |
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Definition
| Maximizing shareholder wealth |
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Term
| One of the major advantages of a sole proprietorship is |
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Definition
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Term
| the partnership form of an organization |
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Definition
| Avoids double taxation of earning found in the corporate form of organization |
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Term
| Corporate governance is the |
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Definition
| relationship and exercise of oversight by the board of directors of the company |
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Term
| Agency theory deals with the issue of |
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Definition
| the conflicts that can arise between the viewpoints and motivations of a firm's owners and managers |
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Term
| The sarbanes oxley act was passed in an effort to |
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Definition
| control corrupt corporate behavior |
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Term
| the major difficulty in most insider trading cases has been |
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Definition
| that inside trades have not been legally well defined |
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Term
| When a corporation uses the financial markets to raise new funds, the sale of securities is made in the |
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Definition
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Term
| Companies that have higher risk than a competitor in the same industry will generally have |
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Definition
| to pay higher interest rate, lower relative stock price, and higher cost of funds than its competitors. |
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Term
| The increase in the internationalization of financial markets has led to |
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Definition
| companies searching the global financial markets for low cost funds, an increase in American Depository Receipts on the new york stock exchange, an increase in debt obligations denominated in foreign currency on US corporate balance sheets |
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Term
| the income statement measures the increase in the assets of a firm over a period of time |
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Definition
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Term
| the P/E ratio provides no indication of investors' expectations about the future of a company |
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Definition
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Term
| Asset accounts are listed in order of their liquidity |
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Definition
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Term
| Marketable securities are temporary investments of excess cash and are valued at their original purchase price |
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Definition
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Term
| Book value per share and market value per share are usually the same dollar amount |
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Definition
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Term
| Retained earning shown on the balance sheet represents available cash on hand generated from prior year's earning but not paid out in dividends |
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Definition
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Term
| ash flow consists of illiquid cash equivalents which are difficult to convert to cash within 90 days |
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Definition
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Term
| An increase in an asset represents a source of funds |
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Definition
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Term
| Interest expense is deductible before taxes and therefore has an after tax cost equal to the interest paid times ( 1- tax rate) |
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Definition
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Term
| A cash flow statement is correct if the net cash flow ties to the ending cash balance |
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Definition
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