fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
56) Which one of the following transactions would occur in the primary market?
A) The gifting of ABC Co. shares by a grandmother to her grandchildren.
B) A financial institution selling shares of OPQ stock to another financial institution.
C) An individual selling shares of JKL stock to an existing JKL shareholder.
D) A financial institution buying shares of LM stock from an LM executive.
E) KM Co. selling new shares of stock to a financial institution.
57) The size, risk, and timing of future cash flows are the key elements evaluated in the:
A) Capital budgeting process.
B) Cash management process.
C) Analysis of working capital.
D) Capital structure decision.
E) Analysis of current assets.
58) Dealer markets:
A) Are reserved strictly for trading debt securities.
B) Only exist outside of Canada.
C) Are called over-the-counter markets.
D) Include NASDAQ and the New York Stock Exchange.
E) List only the securities of the largest firms.
59) Sue Velker wants to start a new business decommissioning nuclear warheads and reactors. The work will involve significant hazards, and Sue is concerned about protecting her personal wealth from any losses the business might incur. If she is to be the majority owner of the business, how should she structure it?
A) As a corporation.
B) As a general partnership.
C) As a limited partnership.
D) As a sole proprietorship.
E) As a real estate investment trust.
60) A firm's capital structure is defined as follows
A) As the combination of debt and equity used to finance the firm's assets and operations.
B) By the types of fixed assets the firm owns.
C) As the mix of short-term and long-term assets owned by the firm.
D) As the amount of fixed assets needed to support every $1 in sales.
E) By the nature of the product or service provided.
61) The primary goal of financial management is to:
A) Maximize current sales.
B) Maximize the current value per share of the existing stock.
C) Avoid financial distress.
D) Minimize operational costs.
E) Maintain steady earnings growth.
62) Which of the following is the BEST description of the goal of the financial manager in a corporation where shares are publicly traded?
A) Maximize sales.
B) Maximize profits.
C) Avoid financial distress.