TutorialAnswers - SCHOOL OF BANKING AND FINANCE FINS1613...

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Tutorial Answers 1 SCHOOL OF BANKING AND FINANCE FINS1613 BUSINESS FINANCE TUTORIAL ANSWERS WEEK 2 –Questions based on Lecture 1, Introduction and Basic Concepts Multiple-choice Questions 1. Important financial decisions include: a. Dividend decisions b. Investment decisions c. Financing decisions d. Answers a and b only e. Answers a, b, and c Answer is e. 2. The primary goal of a publicly-owned firm interested in serving its stockholders should be to: a. Maximize expected total corporate profit. b. Maximize expected EPS. c. Minimize the chances of losses. d. Maximize shareholder wealth. e. Maximize expected net income. Answer is d. 3. Cash flows generated by the firm can be___________. a. Paid to shareholders b. Paid to bondholders c. Paid to government d. Reinvested within the corporation e. All of the above Answer is e. 4. Which of the following statements is most correct? a. Compensating managers with stock can reduce the agency problem between stockholders and managers. b. Restrictions are included in credit agreements to protect bondholders from the agency
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This note was uploaded on 09/22/2011 for the course FINS 1613 taught by Professor Drkhshim during the Three '10 term at University of New South Wales.

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TutorialAnswers - SCHOOL OF BANKING AND FINANCE FINS1613...

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