Foundations of Financial Mgmt: Ch 1

True As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
True Real Capital is composed of long-term plant and equipment.
True During the 1930s, financial practice revolved around such topics as the preservation of capital, maintenance of liquidity, reorganization of financially troubled corporations and bankruptcy.
True In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
True Recently, the emphasis of financial management has been on the relationship between risk and return.
True The first Nobel Prizes given to finance professors were for their contributions to capital structure theory and portfolio theories of risk and return.
True The Internet impacts e-commerce by creating a mechanism for improved communications between a business, its customers, and its suppliers.
True The Internet has accounted for an acceleration of productivity for “old economy” firms.
True The Internet is responsible for many new business models.
True Businesses will increasingly rely on B2B Internet applications to speed up the cash flows through their firms.
True The sole proprietorship represents single-person ownership and offers the advantages of simplicity of decision making and low organizational and operating costs.
True There is unlimited liability in a general partnership.
True In terms of revenues and profits, the corporation is by far the most important form of business organization in the United States.
True Dividends paid to corporate stockholders have already been taxed once as corporate income.
True The formation of a Subchapter S corporation is a way to circumvent the double taxation of a small corporation.
True The issues of corporate governance are really agency problems.
True Institutional investors have had increasing influence over corporations with their ability to vote large blocks of stock and replace poor performing boards of directors.
True A major focus of the Sarbanes Oxley Act is to make sure that publicly traded companies accurately present their assets, liabilities and income in their financial statements.
True There are some serious problems with the financial goal of maximizing the earnings of the firm.
True Insider trading involves the use of information not available to the general public to make profits from trading in a company’s stock.
True Financial markets exist as a vast global network of individuals and financial institutions that may be lenders, borrowers, or owners of public companies worldwide.
True Money markets refer to those markets dealing with short-term securities having a life of one year or less.
True The primary market includes the sale of securities by way of initial public offerings.
True Existing securities are traded in the secondary market.
True Many companies have cross-listed their stock on multiple international stock exchanges and more than several hundred foreign companies have listed their shares on the New York Stock Exchange.
True If a company has a written code of ethics, they will generally avoid ethical problems.

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