Question 1

The purpose of issuing a prospectus during a public stock offering is to ________.

Accepted Answer

A)   validate the corporate bonds issued by them
B)   provide information to the underwriters
C)   disclose information to the SEC
D)   create opportunities for debt financing
E)   obtain short-term financing from institutions

Question 2

Compare and contrast debt financing and equity financing.

Accepted Answer

Debt financing refers to arranging fundi...

Question 3

Albert is the financial manager of a manufacturing firm.Albert has been an integral part of the firm ever since it started business in 2006.Albert's job has transformed over the years and every year he is responsible for creating a budget to identify all sources of raising funds and coordinates the spending of those funds throughout the company.This budget is an example of a(n) ________ budget.

Accepted Answer

A)   start-up
B)   capital
C)   launch
D)   project
E)   operating

Question 4

A company decides to remain highly leveraged to minimize the ownership shares.Critically analyze this approach.

Accepted Answer

Companies that are highly leveraged (tha...

Question 5

Before a company can sell shares to the public in the United States,it must ________.

Accepted Answer

A)   generate a profit of $1 billion
B)   have a turnover of $1 billion
C)   register with the SEC
D)   have fifty or more shareholders
E)   have a hundred or more shareholders

Question 6

Compensating balance refers to the portion of an unsecured loan that ________.

Accepted Answer

A)   is kept on deposit at a lending institution
B)   has already been paid by the borrower
C)   has not been paid by the borrower
D)   is charged by the lender as interest
E)   is not supported by any collateral securities

Question 7

Commercial paper is an arrangement in which a financial institution makes money available for use at any time after the loan has been approved.

Accepted Answer

A) True 
 B)False

Question 8

Compare and contrast secured bonds and debentures.

Accepted Answer

Secured bonds,like secured loans,are bac...

Question 9

Which of the following statements is true of a company's inventory?

Accepted Answer

A)   It is an example of a long-term asset that companies hold.
B)   It is the most liquid current asset of a company.
C)   It has the potential to be converted to cash.
D)   It is classified under accounts receivable.
E)   It is not associated with costs when it is waiting to be sold.

Question 10

Which of the following is a valid observation of venture capital?

Accepted Answer

A)   Venture Capital counts on getting very high returns from a few winners.
B)   Venture is a specialized form of public equity.
C)   Venture capital is the most common type of funding in the United States.
D)   Venture capital is one of the least specialized forms of funding.
E)   Venture capital is one of the most widely available forms of funding.

Question 11

Accounts receivable refers to the money owed to a firm by its customers.

Accepted Answer

A) True 
 B)False

Question 12

Doron is a manufacturer of plastic products.The company produces utensils and gift items.Which of the following would appear as accounts payable in the company's balance sheet?

Accepted Answer

A)   revenue obtained by selling assets to a supplier
B)   funds obtained through issuing corporate bonds
C)   a default payment made on a long-term loan
D)   funds obtained through issuing preference shares
E)   a bill that one of the suppliers has sent for a purchase

Question 13

Rolling forecasts are not based on revenue budgets and cost assumptions.

Accepted Answer

A) True 
 B)False

Question 14

Underwriter is a specialized type of bank that buys the shares from the company preparing an IPO and sells them to investors.

Accepted Answer

A) True 
 B)False

Question 15

Short-term financing is used to cover ________ of a business.

Accepted Answer

A)   current expenses
B)   start-up costs
C)   launch costs
D)   fixed costs
E)   capital expenses

Question 16

Short-term financing is financing that will typically be repaid within ________.

Accepted Answer

A)   one year
B)   two years
C)   three years
D)   five years
E)   ten years

Question 17

________ budget identifies all sources of revenue and coordinates the spending of those funds throughout the coming year.It is also known as the master budget.

Accepted Answer

A)   Launch
B)   Start-up
C)   Capital
D)   Project
E)   Operating

Question 18

Gordon Glass is a large manufacturer of glass products.The company's product range includes glass vessels,car glasses,mirrors and so forth.In order to raise money to open a new plant in Alaska,the company issues corporate bonds.The bonds are unsecured,but include the corporation's promise to pay an interest of 12 percent.The tenure of the bond is five years and neither party can change the maturity date.These bonds are examples of ________.

Accepted Answer

A)   redeemable bonds
B)   callable bonds
C)   debentures
D)   mortgaged bonds
E)   collateralized bonds

Question 19

Capital structure is ________.

Accepted Answer

A)   the original monetary value of an economic item
B)   a statement of the financial position of a company
C)   the summary of the financial balances of a business
D)   a firm's mix of debt and equity financing
E)   a combination of operational expenses and capital expenses

Question 20

Highly leveraged companies will have adequate funds to spend on advertising,staffing,and product development.

Accepted Answer

A) True 
 B)False

Exam 18: Financial Management

Doron is a manufacturer of plastic products.The company produces utensils and gift items.Which of the following would appear as accounts payable in the company's balance sheet?

Correct Answer
verified

Which of the following statements is true of a company's inventory?

Correct Answer
verified

________ budget identifies all sources of revenue and coordinates the spending of those funds throughout the coming year.It is also known as the master budget.

Correct Answer
verified

Underwriter is a specialized type of bank that buys the shares from the company preparing an IPO and sells them to investors.

Correct Answer
verified

Before a company can sell shares to the public in the United States,it must ________.

Correct Answer
verified

Accounts receivable refers to the money owed to a firm by its customers.

Correct Answer
verified

Compare and contrast debt financing and equity financing.

Correct Answer
verified
Debt financing refers to arranging fundi...
View Answer

Highly leveraged companies will have adequate funds to spend on advertising,staffing,and product development.

Correct Answer
verified

Short-term financing is financing that will typically be repaid within ________.

Correct Answer
verified

Short-term financing is used to cover ________ of a business.

Correct Answer
verified

Compensating balance refers to the portion of an unsecured loan that ________.

Correct Answer
verified

Rolling forecasts are not based on revenue budgets and cost assumptions.

Correct Answer
verified

A company decides to remain highly leveraged to minimize the ownership shares.Critically analyze this approach.

Correct Answer
verified
Companies that are highly leveraged (tha...
View Answer

Which of the following is a valid observation of venture capital?

Correct Answer
verified

Commercial paper is an arrangement in which a financial institution makes money available for use at any time after the loan has been approved.

Correct Answer
verified

Correct Answer
verified

Capital structure is ________.

Correct Answer
verified

Compare and contrast secured bonds and debentures.

Correct Answer
verified
Secured bonds,like secured loans,are bac...
View Answer

The purpose of issuing a prospectus during a public stock offering is to ________.

Correct Answer
verified

Correct Answer
verified

Exam 18: Financial Management

Doron is a manufacturer of plastic products.The company produces utensils and gift items.Which of the following would appear as accounts payable in the company's balance sheet?

Correct AnswerverifiedShow Answer

Which of the following statements is true of a company's inventory?

Correct AnswerverifiedShow Answer

________ budget identifies all sources of revenue and coordinates the spending of those funds throughout the coming year.It is also known as the master budget.

Correct AnswerverifiedShow Answer

Underwriter is a specialized type of bank that buys the shares from the company preparing an IPO and sells them to investors.

Correct AnswerverifiedShow Answer

Before a company can sell shares to the public in the United States,it must ________.

Correct AnswerverifiedShow Answer

Accounts receivable refers to the money owed to a firm by its customers.

Correct AnswerverifiedShow Answer

Compare and contrast debt financing and equity financing.

Correct AnswerverifiedDebt financing refers to arranging fundi...View AnswerShow Answer

Highly leveraged companies will have adequate funds to spend on advertising,staffing,and product development.

Correct AnswerverifiedShow Answer

Short-term financing is financing that will typically be repaid within ________.

Correct AnswerverifiedShow Answer

Short-term financing is used to cover ________ of a business.

Correct AnswerverifiedShow Answer

Compensating balance refers to the portion of an unsecured loan that ________.

Correct AnswerverifiedShow Answer

Rolling forecasts are not based on revenue budgets and cost assumptions.

Correct AnswerverifiedShow Answer

A company decides to remain highly leveraged to minimize the ownership shares.Critically analyze this approach.

Correct AnswerverifiedCompanies that are highly leveraged (tha...View AnswerShow Answer

Which of the following is a valid observation of venture capital?

Correct AnswerverifiedShow Answer

Commercial paper is an arrangement in which a financial institution makes money available for use at any time after the loan has been approved.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Capital structure is ________.

Correct AnswerverifiedShow Answer

Compare and contrast secured bonds and debentures.

Correct AnswerverifiedSecured bonds,like secured loans,are bac...View AnswerShow Answer

The purpose of issuing a prospectus during a public stock offering is to ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
Debt financing refers to arranging fundi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Companies that are highly leveraged (tha...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Secured bonds,like secured loans,are bac...
View Answer

Correct Answer
verified

Correct Answer
verified