Ul wealth maximizati 7) Which of the following best describes the goal of thoo f
ID: 2782347 • Letter: U
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Ul wealth maximizati 7) Which of the following best describes the goal of thoo firms amezation goal will ensure high stocR cash flows A) The maximization of the total market valu B) Profit maximization C) Risk minimization D) None of the above I of the firm? 8) Which of the following goals is in the bes A) Profit maximization B) Risk minimization C) Maximizing of t D) Maximizing sales revenues he best long-term interest of stockholders? of the existing shareholders' common stock f 9) All of the following ng operate as financial intermediaries A) commercial banks B) mutual funds. C) insurance companies. D) public universities. 10) Who owns the retained earnings of a public firm? A) The IRS B) Common stockholders C) Bondholders D) Preferred stockholders 11) You are about to determine corporation's included as a tax-deductible expense? e your corporation's taxable income. Which of the below would A) Marketing expenses B) Depreciation expense C) Cost of goods sold D) Dividend expense 12) Which of the following best represents operating income? A) Income after financing activities B) Earnings before interest and taxes C) Income from capital gains D) Income from discontinued operations 13) Y operating expen our firm has the following income statement items: sales of $50,250,000: income tax ses of s10,.115.000, cost of goods sold of $35,025,000, and interest expe A) $15,552,000 B) $58,000,000 C) $5,110,000 D) $4,630,000 14) Which of the following is NOT included in operating income? A) Cost of goods sold B) Sales C) Taxes D) Operating expenses 15) Which of the following is the least liquid current asset? A) Accruals B) Marketable securities C) Accounts receivable D) InventoryExplanation / Answer
7. In Finance Goal of the firm is always described as Maximisation of shareholders' wealth. Profit maximisation are seen for short term goals ( say within one year) and it ignores risk . Risk minimisation is covered under Wealth maximisation objective . Hence the correct option is( A.)The maximisation of total market value of the firms common stock
8.Maximising the shareholders wealth is the best long term goal for the interst of the shareholders. Profit maximisation is used as the goal of firm in short term basis, Riskminimisation is covered in Maximisation of wealth.Maximising sales revenue is irrelivent . hence the Correct option is (C). maximisation of market value of existing shareholders wealth.
9.A Financial Intermediary is the entity which acts as the middlemen between two parties in a finnancial transaction such as commercial commercial banks, Mutaul funds, Pension funds etc. Public universities are not a Financial Intermediary. Hence the correct option is (D). Public Universities.
10.Retained earnings or ploughed back profits are set aside part of profits after meeting all commitments of debentureholders and preference shareholders, therefoer is belongs to Equity shareholders. Hence the correct option is (B) Common stock holders
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