Finance 450 – Chapter 1 – Quiz 1

Corporation A legal entity separate from its owners.
Provide limited liability & avoid double taxation Limited liability companies are primarily designed to:
Market value of existing stock. The primary goal of financial management is to maximize:
Increase the protections against corporate fraud. Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?
Automatically increasing management salaries on an annual basis. Probably the least effective means of aligning management goals with shareholder interests is:
Secondary market. You contacted your stock broker this morning and placed an order to sell 300 shares of a stock that trades on the NYSE. This sale will occur in the:
Working capital management. Theo’s BBQ has $48,000 in current assets and $39,000 in current liabilities. Decisions related to these accounts as referred to as:
Stakeholders. An employee has a claim on the cash flows of Martin’s Machines. This claim is defined as a claim by one of the firm’s:
The controller reports directly to the chief financial officer. Which one of the following correctly defines a common chain of command within a corporation?
Limited partnership Which one of the following forms of business organization offers liability protection to some of its owners but not to all of its owners?

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