16 Questions
What are the three main questions that Corporate Finance addresses?
- What long-term investments should the firm choose? 2. How should the firm raise funds for the selected investments? 3. How should short-term assets be managed and financed?
Prior to the iPad's launch, what did the financial experts at Apple do?
Evaluated the potential market for the iPad, estimated the cost of producing it, and developed a plan to manage the risks that Apple would confront when making transactions in foreign currencies.
What is the main goal of corporate finance?
To generate wealth for the firm's shareholders.
What is the balance sheet model of the firm?
Current Assets, Tangible Fixed Assets, Intangible Fixed Assets, Shareholders' Equity, Current Liabilities, Long-Term Debt
What are the career opportunities in corporate finance?
All of the above
According to the passage, how does the capital structure decision affect the value of the firm?
The capital structure decision affects both the size and slicing of the pie, which is the value of the firm.
What is the primary goal of the financial manager according to the passage?
To maximize shareholder wealth as measured by the market price of the firm's stock.
According to the passage, what does the market price of the firm's stock reflect?
The timing, magnitude, and risk of the cash flows that investors expect the firm to generate over time.
What is the main reason why a financial manager should not try to maximize profit according to the passage?
Profit does not consider risk.
According to the passage, what are the two main responsibilities of the financial manager?
Selecting value creating projects and making smart financing decisions.
What is the relationship between the capital structure decision and the value of the firm according to the passage?
The capital structure decision affects both the size and slicing of the pie, which is the value of the firm.
What should a financial manager try to maximize?
Shareholder wealth
Which of the following is NOT a stakeholder group that firms seek to preserve the interests of, according to the text?
Suppliers
What is the relationship between the firm and the financial markets, according to the diagram in the text?
The firm generates cash flows that must exceed the cash flows it receives from the financial markets
What is the main advantage of the corporate form of business over other forms of business organization?
It allows the firm to raise large amounts of cash
What is the main goal of the agency relationship between stockholders and managers, according to the text?
To maximize shareholder wealth
Learn about the fundamental concepts of Corporate Finance, including long-term investments, funding sources, and management of short-term assets. Explore how financial experts make strategic decisions to maximize company profits.
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