5. Which feature of corporation leads to the agency conflict between management and shareholders? A. Separation of ownership and management B. Double taxation C. Limited liability

5. Which feature of corporation leads to the agency conflict between management and shareholders? A. Separation of ownership and management B. Double taxation C. Limited liability Choose the alternative that best completes the statement or answers the question: 1. What are the three major types of financial management decisions? A. Capital budgeting, human resources, auditing B. Financial forecasting, merger and acquisitions, human resources - C. Capital budgeting, eapital structure, working capital management 2. An cxample of cupital budgeting decision is making decision about: - A. Whether to buy a new equipment B. How many shares of stock to issue C. How to repay the loan 3. Capital structure decisions include determining: A. Which project to accept B. How much inventory is needed? - C. How much equity should be issued? 4. Which one of the following questions is a working capital management decision? A. Should the company close one of its current stores? B. How much should the company borrow? - C. How much inventory should be on hand for immediate sale? 5. Which feature of corporation leads to the agency conflict between management and shareholders? A. Separation of ownership and managenent B. Double taxation C. Limited liability 6. What should be the goal of a corporation/a financial manager? A. Maximize revenue B. Maximize shareholder values C. Minimize expense 7. Sometimes management's inierest may not be in the best interest of stockholders. Therefore, managers may pursue their own interests. This situation ean be explained using the following term: A. Capital constraints problem B. Agency problem C. Investment efficiency problem 8. What is the purpose of Sarbanes. Oxley Act in 2002 ? A. To protect investors from corporate abuses: B. To make company management responsible for the accuracy of the company's financial statements -C. Both A&B 9. Restrictive covenants are intended to reduee the ageney conflict between: A. Sharebolders and management B. Employees and management - C. Creditors and management 10. The decision to issue additional debts is an example of: A. Working capital mamagement decision B. A CEO's duty C. Capital structure decision 11. A business owned by a solitary individual who bas unlimited liability for the firm's debr is a: A. Partnership -B. Sole proprictorship C. Limited partnership 12. A limited partner's potential financial loss in the partnership will exceed his/her investment in that partmership. A. True B. False 13. Which of the following owners have unlimited liability for the firm's debt? A. Sole proprictors B. Limited and general partners - C. General partners and sole proprietors 14. A major disadvantage of corporate form of ownership is: A. Unlimited liability B. Double taxation C. Limited life