Module 1 Flashcards
Partnerships are_______. It means that relationship of partners are based on trust
fiduciary in nature
_______ is a type of corporation that combines the features of a sole proprietorship and a corporation
One-Person Corporation
The relationship between the managers and stockholders is called the _______
agency relationship
The _______ is the top governing body of a corporation
board of directors
The earnings of the corporation are distributed to the shareholders in the form of ______
dividends
Raising capital is a duty of the _______
treasurer
_______ arise when managers deviate from the goal of maximization of shareholder wealth by placing their personal goals ahead of the goals of the shareholders
agency problems
The owner of _______ is entitled to all the profits of his business
sole proprietorship
The ______ of the stock is derived solely on factors inside the company such as good financial performance, highly skilled manpower and the like.
intrinsic value
Financial Management is also called _______
corporate finance
Shareholders have limited liability
TRUE
A partnership with a limited partner is called a general partnership
FALSE
The bylaws are the same with the articles of incorporation
FALSE
Financial markets acts as primary and not as secondary markets
FALSE
In sole proprietorship, ownership can be transferred more quickly and easily than other forms of business
FALSE
Most of the characteristics of a sole proprietorship are almost the same with the partnership
TRUE
“The goal of financial management is to minimize the shareholders’ (or equity owners’) value”
FALSE
A financial manager acts in the shareholder’s best interests by making decisions that increase the value of the stock
TRUE
A partnership can have a limited partner whose liability is not limited only to his/her capital contribution
FALSE
Financial managers are the one in -charge with capital structure decisions
TRUE
