Download Fundamentals of Finance: Introduction to Corporate Finance Exam Notes and more Exams Finance in PDF only on Docsity! Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam .Latest What are the four basic areas of finance? - correct answer✅1. Corporate Finance 2. Investments 3. Financial Institutions 4. International Finance What are the three types of financial management decisions? - correct answer✅1. Capital budgeting 2. Capital structure 3. Working capital management What question is capital budgeting designed to answer? - correct answer✅What long-term investments or projects should the business take on? What question is capital structure designed to answer? - correct answer✅How should we pay for our assets? Should we use debt or equity? What question is working capital management designed to answer? - correct answer✅How do we manage the day-to-day finances of the firm? Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam (2023)GRADED A+ Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam .Latest What are the three major forms of business organization? - correct answer✅Sole proprietorship Partnership Corporation What is the goal of financial management? - correct answer✅Maximize shareholder value What are agency problems? - correct answer✅Conflict of interest between principal (shareholder) and agent (management) The top financial manager within a firm is usually the - correct answer✅Chief Financial Officer (CFO) Treasurer - correct answer✅oversees cash management, credit management, capital expenditures and financial planning Controller - correct answer✅oversees taxes, cost accounting, financial accounting and data processing Sole proprietorship - correct answer✅single owner Sole Proprietorship Advantages - correct answer✅Easiest to start Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam (2023)GRADED A+ Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam .Latest Agency relationship - correct answer✅Principal hires an agent to represent their interest Agency problem - correct answer✅Conflict of interest between principal and agent What are the two types of financial markets? - correct answer✅1. Primary market 2. Secondary markets Primary market - correct answer✅Cash flows to the firm Secondary markets - correct answer✅One owner or creditor selling to another The firm does NOT receive any additional money Types of secondary markets - correct answer✅One owner or creditor selling to another Dealer market Auction markets (exchanges) Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam (2023)GRADED A+ Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam .Latest Dealer market - correct answer✅Dealers generally buy and sell for themselves Agents or brokers match buyers and sellers Over-the-counter (OTC) market (electronic market) NASDAQ (more firms, but generally smaller) Auction markets (exchanges) - correct answer✅Physical location Match buyers and sellers NYSE (fewer firms, but much larger firms) Fundamentals of Finance: Chapter 1 - Introduction to Corporate Finance Exam (2023)GRADED A+
