Bus Finance Flashcards
This is the set of laws, policies, incentives, and monitors designed to handle the issues arising from the separation of ownership and control.
corporate governance
This subarea of finance looks at firm decisions in acquiring and utilizing cash received from investors or from retained earnings.
financial management
The portion of a company’s profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as
retained earnings.
Nonwage compensation that might actually enhance owner value, in that such items may boost managers’ productivity.
perks or perquisites
Outside parties that monitor the firm include all of the following EXCEPT
the New York Stock Exchange.
Which of these does NOT act as a monitor of how the firm is being run outside the firm?
members of the board of directors
An employee stock option plan is
a way to align the interests of employees with those of the owners.
The board of directors
are elected by shareholders.
An angel investor differs from a venture capitalist because of the
size of investment.
All of the following are advantages to organizing as a corporation EXCEPT
double taxation.
Which of the following is the firm’s highest-level financial manager?
chief financial officer
Individuals who provide small amounts of capital and expert business advice to small firms in exchange for an ownership stake in the firm are referred to as
angel investors.
Which of the following is considered a hybrid organization?
S corporation
limited liability company
limited liability partnership
limited partnership
all of these choices are correct.
In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship, which of these must happen?
Both the business must be re formed as a partnership and the owner must give up some control.
These individuals examine a firm’s financial strength for its debt holders.
credit analysts
From a taxation perspective, the form of business organization with the highest business level taxes is the
corporation.
This is a general term for securities like stocks, bonds, and other assets that represent ownership in a cash flow.
financial asset
Restricted stock is
a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied.
All of the following are an example of a fiduciary relationship EXCEPT
the shareholder elects a board member.
Which of the following can create ethical dilemmas between corporate managers and stockholders?
agency relationship
This subarea of finance is important for adapting to the global economy.
international finance
These individuals follow a firm, conduct their own evaluations of the company’s business activities, and report to the investment community.
investment analysts
Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?
dividends
Which of the following is NOT a function of the board of directors?
provide reports to the auditors
