MGT+3062+EXAM+1+SPRING+200+_1_ - MGT 3062 EXAM 1 SPRING...

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MGT 3062 EXAM 1 SPRING 2008 Student: ID: Choose the BEST answer to each question. Bubble in your answer on the form provided. For computational questions, show your work (for possible partial credit). If you feel that the answer is not provided, show your work, explain your assumptions, and write your answer on the exam. Questions are worth 2.5 points each (consider 8 questions to be "bonus" questions). Remove all hats and dark glasses. If you have to go to the restroom, go now. No electronic devices allowed. You may not use your cell phone as a calculator. As a courtesy to your classmates, no questions allowed after initial instructions are given. Ethics Challenge: I swear by everything I hold sacred and my family honor that: the work on this exam is my own without any outside assistance; that I did not provide assistance to another classmate; that I used no electronic devices for information storage, retrieval, or communications; that I have abided by the Georgia Tech honor code in the preparation and execution of this exam. Signature: 1. The primary goal of financial management is to: A. maintain steady growth in both sales and net earnings. B. maximize current dividends per share of the existing stock. C. avoid financial distress. D. maximize the current value per share of the existing stock. E. minimize operational costs and maximize firm efficiency. 2. Which one of the following actions by a financial manager creates an agency problem? A. agreeing to expand the company at the expense of stockholders' value B. refusing to borrow money when doing so will create losses for the firm C. refusing to lower selling prices if doing so will reduce the net profits D. increasing current costs in order to increase the market value of the stockholders' equity E. agreeing to pay bonuses based on the market value of the company stock 3. A conflict of interest between the stockholders and company management is called: A. corporate activism. B. stockholders' liability. C. legal liability. D. corporate breakdown. E. the agency problem. 4. Which one of the following is a primary market transaction? A. a bank selling shares of a medical firm to an individual B. a dealer buying newly issued shares of stock from a corporation C. a sole proprietor buying shares of stock from an individual investor D. an individual investor selling shares of stock to another individual E. a dealer selling shares of stock to an individual investor ACHIEVE. LEAD. SUCCEED. | THE BUSINESS SCHOOL AT GEORGIA TECH Barry Marchman, Ph.D. Room 407 (404) 894-5110
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5. The tax rates are as shown. California Surfin' currently has taxable income of $86,750. How much additional tax will the firm owe if taxable income increases by $16,500? A. $6,435
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This note was uploaded on 02/09/2012 for the course MGT 3078 taught by Professor Marchman during the Spring '12 term at Georgia Institute of Technology.

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MGT+3062+EXAM+1+SPRING+200+_1_ - MGT 3062 EXAM 1 SPRING...

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