29. (p. 9) The following are advantages of separation of ownership and management of corporations except: a. Corporations can exist foreverb. Facilitate transfer of ownership without affecting the operations of the firmc. Hire professional managersD. Incur agency costs Type: Medium 30. (p. 9) Conflicts of interest between shareholders and managers of a firm result in: Type: Medium 31. (p. 9) In the principal-agent framework: Type: Medium 1-12
Chapter 01 - Finance and the Financial Manager 32. (p. 9) Costs associated with the conflicts of interest between the bondholders and the shareholders of a corporation are called: Type: Difficult 33. (p. 9) Agency costs are incurred by a corporation because: a. Managers may not attempt to maximize the value of the firm to shareholdersb. Shareholders incur monitoring costc. Separation of ownership and managementD. All of the above Type: Medium 34. (p. 9) The following groups are some of the claimants to a firm's income stream: I) Shareholders; II) Debt-holders; III) Employees; IV) Management and V) Government Type: Medium 1-13
Chapter 01 - Finance and the Financial Manager 35. (p. 9) Informational asymmetry refers to the differences in information regarding the value of a firm among, for example: I) Shareholders; II) Managers; III) Bondholders Type: Medium 1-14
Chapter 01 - Finance and the Financial Manager 36. (p. 11) The financial goal of a corporation is to: Type: Difficult 1-15
Chapter 01 - Finance and the Financial Manager True / False Questions 37. (p. 5) The board of directors is ultimately responsible for all large investment decisions. TRUE Type: Medium 38. (p. 5) A corporation has a legal existence of its own and is based on "articles of incorporation." TRUE Type: Easy 39.
- Fall '14
- Schweizer SGU 1-7, Schweizer SGU 1-19, National Soaring Museum