This quiz works best with JavaScript enabled. Home > Corporate Finance > Corporate Finance > Corporate Finance – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Corporate Finance Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A business manager is an agent to the owners ( the principals) and has ..... to those principals A) No responsibility. B) A fiduciary responsibility. C) An obligation to the community only. D) A legal obligation called "best practices". Show Answer Correct Answer: B) A fiduciary responsibility. 2. How many parts the structure of an accounting standard includes A) 3. B) 4. C) 5. D) 6. Show Answer Correct Answer: B) 4. 3. Shareholder (stockholder) A) An individual or institution that legally owns one or more shares of the share capital of a public or private corporation. B) A person with interest or concern in a business. C) The person with the highest authority or most important position in a company, organization, institution, or group. D) A group of people who jointly supervise the activities of an organization. Show Answer Correct Answer: A) An individual or institution that legally owns one or more shares of the share capital of a public or private corporation. 4. How many questions remained there? A) At least two. B) Just one. C) Maybe three. D) No more!. Show Answer Correct Answer: D) No more!. 5. What is the present value of an annuity of $ 10, 000 paid annually for 15 years if the interest rate is 7%? A) $ 96, 852.68. B) $ 98, 852.68. C) $ 97, 852.68. D) $ 95, 852.68. Show Answer Correct Answer: C) $ 97, 852.68. 6. What is the present value of $ 10, 000 to be received in 5 years if the interest rate is 8%? A) $ 6, 710.68. B) $ 6, 610.68. C) $ 7, 671.68. D) $ 7, 160.68. Show Answer Correct Answer: A) $ 6, 710.68. 7. Which of the following dividends is never in the form of cash? A) Regular dividend. B) Special dividend. C) Stock dividend. D) Liquidation dividend. Show Answer Correct Answer: C) Stock dividend. 8. A share certificate is issued by a company under its ..... A) Article of Association. B) Common Seal. Show Answer Correct Answer: B) Common Seal. 9. The primary goal of the financial management is A) To maximize the return. B) To minimize the risk. C) To maximize the wealth of owners. D) To maximize profit. Show Answer Correct Answer: C) To maximize the wealth of owners. 10. The following are measures used by firms when making capital budgeting decisions except: A) Payback period. B) Internal rate of return. C) Net present value. D) They will be destroyed. Show Answer Correct Answer: D) They will be destroyed. 11. Wanda borrowed $ 3, 000 from a bank at an interest rate of 12% per year for a 2-year period. How much interest does she have to pay the bank at the end of 2 years? A) 540. B) 450. C) 720. D) 620. Show Answer Correct Answer: C) 720. 12. THERE SHOULD BE NO DIFFERENCE BETWEEN THE YIELD ON A TREASURY BILL AND A TREASURY BOND SINCE BOTH ARE BACKED BY THE FEDERAL GOVERNMENT. TRUE OF FALSE? A) TRUE; THERE SHOULD BE A HIGHER EXPECTED RATE OF RETURN ON A TREASURY BOND BECAUSE IT IS LONG TERM AND A LOWER RATE OF RETURN ON A TREASURY BILL BECAUSE IT IS SHORT-TERM. B) FALSE; THERE SHOULD BE A HIGHER EXPECTED RATE OF RETURN ON A TREASURY BOND BECAUSE IT IS LONG-TERM AND A LOWER RATE OF RETURN ON A TREASURY BILL BECAUSE IT IS SHORT-TERM. C) TRUE; THERE SHOULD BE A LOWER EXPECTED RATE OF RETURN ON A TREASURY BOND BECAUSE IT IS SHORT TERM AND A HIGHER RATE OF RETURN ON A TREASURY BILL BECAUSE IT IS LONG-TERM. D) FALSE; THERE SHOULD BE A LOWER EXPECTED RATE OF RETURN ON A TREASURY BOND BECAUSE IT IS SHORT TERM AND A HIGHER RATE OF RETURN ON A TREASURY BILL BECAUSE IT IS LONG-TERM. Show Answer Correct Answer: B) FALSE; THERE SHOULD BE A HIGHER EXPECTED RATE OF RETURN ON A TREASURY BOND BECAUSE IT IS LONG-TERM AND A LOWER RATE OF RETURN ON A TREASURY BILL BECAUSE IT IS SHORT-TERM. 13. Stocks last for a finite time. A) True. B) False. Show Answer Correct Answer: B) False. 14. When the price of a bond is above the face value, the bond is said to be A) Trading at par. B) Trading at a premium. C) Trading at a discount. D) Trading below par. Show Answer Correct Answer: B) Trading at a premium. 15. A firm's ratio that is higher than the benchmark is always a good thing. A) True. B) False. Show Answer Correct Answer: B) False. 16. Just today, DANONE, Inc.'s common stock paid a $ 1.40 annual dividend per shareand had a closing price of $ 21. Assume that the market's required return, or capitalizationrate, for this investment is 12 percent and that dividends are expected to grow at aconstant rate forever.Required:What is the expected dividend yield? A) 4.5 percent. B) 6 percent. C) 5 percent. D) 7 percent. Show Answer Correct Answer: D) 7 percent. 17. Operating cash flow is defined as: A) Pretax income + Depreciation. B) Net income-Dividends. C) Pretax income-Taxes. D) EBIT + Depreciation-Taxes. Show Answer Correct Answer: D) EBIT + Depreciation-Taxes. 18. Which accounting strategy only recognizes a transaction when a sale or cash is involved? A) Accural Accounting. B) Cash Accounting. Show Answer Correct Answer: B) Cash Accounting. 19. Hewitt Packing Company has an issue of $ 1, 000 par value bonds with a 14 percent annual coupon interest rate. The issue has ten years remaining to the maturity date. Bonds of similar risk are currently selling to yield a 12 percent rate of return. The current value of each Hewitt bond is ..... A) $ 791.00. B) $ 1, 000. C) $ 1, 052.24. D) $ 1, 113.00. Show Answer Correct Answer: D) $ 1, 113.00. 20. A document of title of ownership of share. A) Share capital. B) Share certificate. Show Answer Correct Answer: B) Share certificate. ← PreviousNext →Related QuizzesCorporate Finance QuizzesCorporate Finance Quiz 1Corporate Finance Quiz 2Corporate Finance Quiz 3Corporate Finance Quiz 5Corporate Finance Quiz 6Corporate Finance Quiz 7Corporate Finance Quiz 8Corporate Finance Quiz 9Corporate Finance Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books