Introduction to Financial Management 1. Maximization of shareholder wealth as a goal is superior to profit maximiza

Question

Introduction to Financial Management

1. Maximization of shareholder wealth as a goal is superior to profit maximization because:

a. it considers the time value of the money.

b. following the goal of shareholder wealth maximization will ensure high stock prices.

c. it considers uncertainty.

d. A and C

2) Which of the following is NOT true for a limited partnership?

a. Limited partners may sell their interest in the company.

b. Limited partners can only manage the business.

c. One general partner must exist who has unlimited liability.

d. Only the name of general partners can appear in the name of the firm.

3) Revenues are taxed

a. to achieve socially desirable goals.

b. to provide revenues for government expenditures.

c. for economic stabilization.

d. all of the above

4) Which of the following categories of owners have unlimited liability?

a. general partners in a limited partnership

b. sole proprietors

c. shareholders of a corporation