1) A stakeholder is:

Select one:

O a. any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.

Ob.a creditor to whom a firm currently owes money.

O c. any person who has voting rights based on stock ownership of a corporation.

O d. a person who owns shares of stock.

2)Which one of the following best states the primary goal of financial management?

Select one:

O a. increase cash flow and avoid financial distress O

b. maximize current dividends per share

Oc minimize operational costs while maximizing firm profitability

O d. maximnize the current value per share

3) Secondary markets

Select one:

O a. are concerned with the trading of previously issued securities between investors.

Ob. are a means by which funds are cycled from savers to borrowers.

Oc. are an important vehicle for established firms to raise additional money for expansion.

O d. function as a place for smaller, less well-known firms to issue securities.

4)The problem of motivating one party to act in the best interest of another party is known as the agency problem.

Select one: O a. False O b. True

5)Limited partners may actively manage the business.

Select one: O a. False Ob. True

6)An advantage of balance sheet numbers is that assets reflect current market values.

Select one: O a. True O b. False

7)A positive cash flow to creditors represents net cash outflow from the firm.

Select one: Oa. True Ob. False