A) Maximize the stock price per share over the long run, which is the stock's intrinsic value.
B) Maximize the firm's expected EPS.
C) Minimize the chances of losses.
D) Maximize the firm's expected total income.
E) Maximize the stock price on a specific target date.
G) C) and D)
Correct Answer
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Correct Answer
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A) Corporations are at a disadvantage relative to partnerships because they have to file more reports to state and federal agencies, including the Securities and Exchange Administration, even if they
Are not publicly owned.
B) In a regular partnership, liability for the firm's debts is limited
To the amount a particular partner has invested in the business.
C) A fast-growth company would be more likely to set up as a partnership for its business organization than would a slow-growth
Company.
D) Partnerships have difficulty attracting capital in part because of their unlimited liability, the lack of impermanence of the
Organization, and difficulty in transferring ownership.
E) A major disadvantage of a partnership relative to a corporation as a form of business organization is the high cost and practical
Difficulty of its formation.
G) B) and D)
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Correct Answer
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A) If expected inflation increases, interest rates are likely to increase.
B) If individuals in general increase the percentage of their income
That they save, interest rates are likely to increase.
C) If companies have fewer good investment opportunities, interest
Rates are likely to increase.
D) Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of
Bankruptcy, hence the riskiness of all debt securities.
E) Interest rates on long-term bonds are more volatile than rates on
Short-term debt securities like T-bills.
G) B) and E)
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Correct Answer
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A) This is an example of an exchange of physical assets.
B) This is an example of a primary market transaction.
C) This is an example of a direct transfer of capital.
D) This is an example of a money market transaction.
E) This is an example of a derivatives market transaction.
G) None of the above
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A) It subjects the firm to additional regulations.
B) It cannot affect the amount of the firm's operating income that
Goes to taxes.
C) It makes it more difficult for the firm to raise additional
Capital.
D) It makes the firm's investors subject to greater potential personal
Liabilities.
E) It makes it more difficult for the firm's investors to transfer their ownership interests.
G) None of the above
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Correct Answer
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A) If General Electric were to issue new stock this year it would be considered a secondary market transaction since the company already
Has stock outstanding.
B) Capital market transactions only include preferred stock and common
Stock transactions.
C) The distinguishing feature between spot markets versus futures markets transactions is the maturity of the investments. That is, spot market transactions involve securities that have maturities of less than one year, whereas futures markets transactions involve
Securities with maturities greater than one year.
D) Both Nasdaq "dealers" and NYSE "specialists" hold inventories of
Stocks.
E) An electronic communications network (ECN) is a physical location
Exchange.
G) B) and C)
Correct Answer
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Correct Answer
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