Key Concepts in Business Management

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What is the primary goal of financial management?

Maximizing short term investments
Maximizing employee welfare
Maximizing community issues
Maximizing shareholder wealth (correct)

What is the key concept behind a Benefit Corporation (B-Corp)?

Focusing solely on short term gains
Maximizing shareholder wealth
Ignoring ethical and legal standards
Expanding fiduciary responsibilities beyond shareholders' interests (correct)

What do dividend decisions in a company determine?

How to maximize short term gains
How much of earnings to distribute as dividends (correct)
How to reduce employee welfare costs
How much to invest in long-term projects

What does going public mean for a corporation?

Selling shares to the general public for the first time (D) Signup and view all the answers

In finance, what does working capital management primarily focus on?

Managing short-term assets and liabilities effectively (B) Signup and view all the answers

What do fiduciary obligations for most firms primarily include?

Maximizing shareholder wealth considering legal, ethical, and community responsibilities (B) Signup and view all the answers

What is the relationship between a company's market price and its intrinsic price according to the text?

When the company's market price is equal to its intrinsic price, it is safe for the general public to invest in them. (A) Signup and view all the answers

What is the purpose of Risk Management?

To identify, assess, manage and control potential events or negative situations to provide reasonable assurance regarding the achievement of the organization's objectives. (C) Signup and view all the answers

What is the primary purpose of Corporate Governance according to the text?

To hold the Board and senior management accountable for ensuring ethical behavior and reconciling long term customer satisfaction with shareholder value to the benefit of all stakeholders and society. (D) Signup and view all the answers

What is the Agency Problem according to the text?

It takes the stance that management is likely to pursue their own personal interests, rather than as stewards. (D) Signup and view all the answers

What is the key difference between a Corporation and a Partnership according to the text?

A corporation has a juridical personality so that it can sue and be sued, while a partnership's personal insolvency, death or retirement of one of the owners automatically dissolves it. (C) Signup and view all the answers

Who are Angel or Venture Capitalists?

Individuals who offer finance for enterprises that are considered too hazardous by banks. (D) Signup and view all the answers

Which of the following best describes intrinsic value?

The real value of the business computed by financial managers (A) Signup and view all the answers

What is the primary function of a remuneration committee?

To determine the salaries and benefits of the company's executives (B) Signup and view all the answers

What is the purpose of earnings retention?

To reinvest profits back into the company for growth and development (D) Signup and view all the answers

What is the primary goal of corporate governance?

To address the agency problem between managers and shareholders (C) Signup and view all the answers

What does satisficing refer to in the context of financial management?

Finding an acceptable outcome that meets the goals of multiple stakeholders (B) Signup and view all the answers

What is the primary responsibility of a nomination/election/selection committee?

To implement a formal and transparent process for nominating and electing board members (B) Signup and view all the answers