Financial Management Quiz: Objectives And Functions!
Settings
- 1.
- A.
Maximization of Corporate Profits.
- B.
Maximizing a company's market share.
- C.
Maximizing shareholder wealth
- D.
Beating the competition.
- E.
Maximizing the company's share market price.
- 2.Which of the following is NOT a function of financial management:
- A.
Deciding the best sources of finance.
- B.
Spending money on capital expansion
- C.
Preparation of Tax Returns
- D.
Evaluating how much dividends to pay shareholders.
- E.
The management of working capital.
- 3.Numerous research has consistently shown that there is a strong positive correlation between the size of the executive bonuses paid to a financial manager and that financial manager's performance in maximizing shareholder wealth.
- A.
True
- B.
False
- 4.What is the main criticism in using shareholder wealth as the best criterion in evaluating the performance of a financial manager:
- A.
It does not take into account the shareholder's exposure to financial risk.
- B.
It is not sustainable.
- C.
It does not take into account the size of the shareholders investment.
- D.
Maximizing profits is a more suitable criterion.
- E.
Share market prices can be manipulated in the short term.
- 5.When making investment decisions, professional investors mainly consider the size of their expected returns on investment.
- A.
True
- B.
False
- 6.
- A.
Minimizing Corporate Tax
- B.
Slashing costs
- C.
Beating the Competition
- D.
Maximizing Profits
- E.
Maximizing market share.
- 7.A company's market capitalization = Number of issued shares * market price per share.
- A.
True
- B.
False
- 8.Which of the following would NOT be classified as a finance decision:
- A.
Spending money on Capital Expenditure.
- B.
Raising money using equity finance.
- C.
Spending money on revenue expenditure.
- D.
Borrowing Funds.
- E.
Paying dividends to shareholders
- 9.Which of the following would be part of a financial manager's dividend (or operating) decisions:
- A.
Spending money on Capital Expenditure.
- B.
Raising money using equity finance.
- C.
Spending money on revenue expenditure.
- D.
Borrowing Funds.
- E.
Paying dividends to shareholders
- 10.Which of the following would be part of a financial manager's investment decision:
- A.
Spending money on Capital Expenditure.
- B.
Raising money using equity finance.
- C.
Spending money on revenue expenditure.
- D.
Borrowing Funds.
- E.
Paying dividends to shareholders
Back to top