Question 1

Short-term financing not backed by collateral is called _____.

Accepted Answer

A)   debt capital
B)   unsecured financing
C)   mortgage bonds
D)   trade credit
E)   unprotected financingF) C) and D)
G) A) and E)

Question 2

Trustee bonds refer to corporate bonds that are secured by various assets of the issuing firm.

Accepted Answer

A) True 
 B)False

Question 3

Private placements are used to sell stock to individual investors.

Accepted Answer

A) True 
 B)False

Question 4

Venture capital is money invested in small firms that have the potential to become very successful.

Accepted Answer

A) True 
 B)False

Question 5

An initial public offering occurs anytime when a corporation sells stock to the general public.

Accepted Answer

A) True 
 B)False

Question 6

The right to vote on major corporate actions belongs to

Accepted Answer

A)   bondholders.
B)   preferred stockholders.
C)   prefered bondholders.
D)   convertible preferred stockholders.
E)   common stockholders.F) A) and B)
G) A) and D)

Question 7

Which of the following sources of funds would be the last resort for a corporation?

Accepted Answer

A)   sales revenues
B)   common stock
C)   preferred stock
D)   debt capital
E)   the sale of assetsF) A) and D)
G) C) and D)

Question 8

For a corporation, money received from the sale of shares of ownership in a business is called _____.

Accepted Answer

A)   sales revenue
B)   debt capital
C)   equity capital
D)   factor proceeds
E)   cash flowF) A) and B)
G) D) and E)

Question 9

The kinds of funds available to a business include all except which of the following?

Accepted Answer

A)   debt capital
B)   sales of assets
C)   government grants
D)   sales revenue
E)   equity capitalF) A) and B)
G) A) and C)

Question 10

Selling a firm's unneeded assets is a reasonable last resort when neither equity capital nor debt capital can be found to meet a firm's need for capital.

Accepted Answer

A) True 
 B)False

Question 11

In regards to cash flow, a firm should ideally have

Accepted Answer

A)   enough money coming into the firm to cover the expenses in that period.
B)   more cash flowing out than in since this represents growth.
C)   to use short-term financing only two to three times a year.
D)   a constant need for short-term financing.
E)   most of its cash going to its customers.F) A) and B)
G) A) and C)

Question 12

A promissory note is a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date.

Accepted Answer

A) True 
 B)False

Question 13

What does it mean to use equity financing? Why might a large corporation want to do this?

Accepted Answer

Equity financing refers to raising capit...

Question 14

What right do most common stockholders have that most preferred stockholders do not have?

Accepted Answer

A)   first claim to company distributions
B)   voting rights
C)   ability to sell stock in the open market
D)   dividend guarantees
E)   authority over daily business decisionsF) B) and E)
G) A) and E)

Question 15

A written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date is called _____.

Accepted Answer

A)   a promissory note
B)   collateral
C)   a factor account
D)   a charge account
E)   a term loan agreementF) B) and C)
G) D) and E)

Question 16

All of the activities concerned with obtaining money and using it effectively are called financial management.

Accepted Answer

A) True 
 B)False

Question 17

The distribution of a corporation's earnings to the stockholders is called paying a dividend.

Accepted Answer

A) True 
 B)False

Question 18

The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

Accepted Answer

A) True 
 B)False

Question 19

Kirsten purchased a new dining room table and china cabinet from Discount Furniture, which offered a one-year special with no interest or financing charges.When Kirsten makes her purchase, Discount Furniture checks her credit and seeks approval for her.Upon approval, Kirsten receives information informing her that she will make payments to Regional Finance Company.This arrangement is an example of _____.

Accepted Answer

A)   unsecured bank loan
B)   commercial paper
C)   factoring
D)   pledging accounts receivable
E)   selective financingF) C) and E)
G) A) and C)

Question 20

Assume that the First State Bank of Chicago requires a 20 percent compensating balance on short-term loans.If you borrow $50,000, at least ____ of the loan amount must be kept on deposit at the bank.

Accepted Answer

A)   $4,000
B)   $10,000
C)   $1,000
D)   $20,000
E)   $50,000F) D) and E)
G) A) and B)

Exam 16: Mastering Financial Management

What does it mean to use equity financing? Why might a large corporation want to do this?

Correct Answer
Answered by ExamLex AI
Equity financing refers to raising capit...
View Answer

Trustee bonds refer to corporate bonds that are secured by various assets of the issuing firm.

Correct Answer
verified

An initial public offering occurs anytime when a corporation sells stock to the general public.

Correct Answer
verified

The kinds of funds available to a business include all except which of the following?

Correct Answer
verified

The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

Correct Answer
verified

Short-term financing not backed by collateral is called _____.

Correct Answer
verified

Which of the following sources of funds would be the last resort for a corporation?

Correct Answer
verified

Selling a firm's unneeded assets is a reasonable last resort when neither equity capital nor debt capital can be found to meet a firm's need for capital.

Correct Answer
verified

A written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date is called _____.

Correct Answer
verified

Venture capital is money invested in small firms that have the potential to become very successful.

Correct Answer
verified

For a corporation, money received from the sale of shares of ownership in a business is called _____.

Correct Answer
verified

All of the activities concerned with obtaining money and using it effectively are called financial management.

Correct Answer
verified

Private placements are used to sell stock to individual investors.

Correct Answer
verified

A promissory note is a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date.

Correct Answer
verified

Correct Answer
verified

The distribution of a corporation's earnings to the stockholders is called paying a dividend.

Correct Answer
verified

What right do most common stockholders have that most preferred stockholders do not have?

Correct Answer
verified

The right to vote on major corporate actions belongs to

Correct Answer
verified

Assume that the First State Bank of Chicago requires a 20 percent compensating balance on short-term loans.If you borrow $50,000, at least ____ of the loan amount must be kept on deposit at the bank.

Correct Answer
verified

In regards to cash flow, a firm should ideally have

Correct Answer
verified

Exam 16: Mastering Financial Management

What does it mean to use equity financing? Why might a large corporation want to do this?

Correct AnswerAnswered by ExamLex AIEquity financing refers to raising capit...View AnswerShow Answer

Trustee bonds refer to corporate bonds that are secured by various assets of the issuing firm.

Correct AnswerverifiedShow Answer

An initial public offering occurs anytime when a corporation sells stock to the general public.

Correct AnswerverifiedShow Answer

The kinds of funds available to a business include all except which of the following?

Correct AnswerverifiedShow Answer

The quality of a firm's accounts receivables is the credit standing of the firm's customers, coupled with the customers' ability to repay their credit obligations.

Correct AnswerverifiedShow Answer

Short-term financing not backed by collateral is called _____.

Correct AnswerverifiedShow Answer

Which of the following sources of funds would be the last resort for a corporation?

Correct AnswerverifiedShow Answer

Selling a firm's unneeded assets is a reasonable last resort when neither equity capital nor debt capital can be found to meet a firm's need for capital.

Correct AnswerverifiedShow Answer

A written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date is called _____.

Correct AnswerverifiedShow Answer

Venture capital is money invested in small firms that have the potential to become very successful.

Correct AnswerverifiedShow Answer

For a corporation, money received from the sale of shares of ownership in a business is called _____.

Correct AnswerverifiedShow Answer

All of the activities concerned with obtaining money and using it effectively are called financial management.

Correct AnswerverifiedShow Answer

Private placements are used to sell stock to individual investors.

Correct AnswerverifiedShow Answer

A promissory note is a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The distribution of a corporation's earnings to the stockholders is called paying a dividend.

Correct AnswerverifiedShow Answer

What right do most common stockholders have that most preferred stockholders do not have?

Correct AnswerverifiedShow Answer

The right to vote on major corporate actions belongs to

Correct AnswerverifiedShow Answer

Assume that the First State Bank of Chicago requires a 20 percent compensating balance on short-term loans.If you borrow $50,000, at least ____ of the loan amount must be kept on deposit at the bank.

Correct AnswerverifiedShow Answer

In regards to cash flow, a firm should ideally have

Correct AnswerverifiedShow Answer

Correct Answer
Answered by ExamLex AI
Equity financing refers to raising capit...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified