How does maximising shareholder wealth affect a firm’s responsibility towards society?
Correct answer A. It does not relieve the firm's responsibility towards society
Subject / 495 questions
Finance MCQs
Page 25 of Finance multiple-choice questions with answers. Tap an option to check yourself.
Page 25 of 25
Agency theory suggests that managers (the agents), especially in large publicly owned firms, may pursue objectives different from those of which group?
Correct answer D. Shareholders
The market price of a firm’s stock reflects the combined judgement of all market participants about the value of what?
Correct answer B. Particular firm
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A major aspect of financial management is providing the finance needed to support what?
Correct answer C. Assets
The Board of Directors sets company-wide policy and advises the CEO and other senior executives, who manage which of the company’s activities?
Correct answer B. Day-to-Day activities
Corporate governance covers the relationship between which parties in a company?
Correct answer C. Shareholders, board of directors and senior management
What is the system by which companies are directed and controlled known as?
Correct answer D. Corporate Governance
What is the term for all the groups that have an interest in the fortunes of a company?
Correct answer B. Stakeholders
Who are included among a firm’s stakeholders?
Correct answer D. All of them
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What is a person called who is authorised by another, the principal, to act on that person’s behalf?
Correct answer D. Agent
Profit maximisation means maximising a firm’s earnings measured in what way?
Correct answer B. After Tax
What is the ratio called that divides annual cash dividends by annual earnings, or dividends per share by earnings per share?
Correct answer C. Dividend payout ratio
When it comes to value creation, which is the most important of a firm’s three major decisions?
Correct answer A. Value creation
With an overall goal in mind, what is financial management concerned with?
Correct answer D. All of these
Which discipline deals with acquiring, financing and managing assets with some overall goal in mind?
Correct answer D. Financial management
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