fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
B) Management of current assets and liabilities.
C) Management of net working capital.
D) Which projects should be accepted.
E) Timing and risks of cash flows for an upcoming project.
131) Which one of the following best illustrates the agency problem?
A) An employee offers a suggestion which will save the company money and reduce the stress of his job.
B) The company creates a management bonus program whereby managers are rewarded when the market price of the firm's stock rises.
C) Management rejects a merger which would enhance stock price.
D) Management expands its operations overseas which is favourably received by the financial markets.
E) Management reduces the risk level of the firm while maintaining a steady stock price.
132) The decisions made by financial managers should all be ones which increase the:
A) Size of the firm.
B) Growth rate of the firm.
C) Marketability of the managers.
D) Market value of the existing owners' equity.
E) Financial distress of the firm.
133) Ann is interested in purchasing Ted's factory. Since Ann is a poor negotiator, she hires Mary to negotiate the purchase price. Identify the parties to this transaction.
A) Mary is the principal and Ann is the agent.
B) Ted is the principal and Ann is the agent.
C) Mary is the agent while Ted and Ann together are principals.
D) Ann is the principal and Mary is the agent.
E) Ann is the principal and Ted is the agent.
134) The triple bottom line measures:
A) Measures a company's economic, social and environmental performance.
B) Measures a company's performance within its three financial statements.
C) Measures a company's performance within the primary, secondary and tertiary markets.
D) Measures a company's performance of its revenues, gross profit and net income against its annual strategic plan.
E) Measures a company's performance against the top three competitors in the market.
135) The primary market is defined as the market:
A) Wherein the original sale of securities by the issuer to the general public occurs.
B) Where stocks and bonds are exchanged between dealers.
C) Mechanism by which a sale of a financial instrument between two shareholders is conducted.
D) Operated by brokers for the benefit of shareholders.
E) Commonly known as the over-the-counter market.
136) A general partnership is best defined as a business owned by: