QCM 3

Question 1

The separation of ownership and
The separation of ownership and
management leads to agency costs
True
False

Answer 1

True

Question 2

The ultimate goal of the firm is to
The ultimate goal of the firm is to
make profits
True
False

Answer 2

False

Question 3

The boards of directors is appointed by
the firm’s senior officers
True
False

Answer 3

False

Question 4

Real assets can be intangible
True
False

Answer 4

True

Question 5

Firms can create value by developing
Firms can create value by developing
good relationships with stakeholders
True
False

Answer 5

True

Question 6

The markets for long-term debt and
equity are called capital markets.
True
False

Answer 6

True

Question 7

After their IPO Apple raised financing
from venture capital companies.

True
False

Answer 7

False

Question 8

The Cost of Capital is the minimum
acceptable rate of return for
investments in real assets
True
False

Answer 8

True

Question 9

Which of the firm’s financial
statements most clearly recognizes the
payment for new equipment?

The Balance Sheet
The Income Statement
The Cashflow Statement
The statement of Financial Position

Answer 9

The Cashflow Statemen

Question 10

When a firm pays its shareholders a When a firm pays its shareholders a dividend, it will show up as

Answer 10

A negative A negative
cashflow from cashflow from
financing activities financing activities
in the cashflow in the cashflow
statement