Test Bank For Finance for Executives Managing for Value Creation, 7th Edition Gabriel Hawawini, Claude Viallet Chapter 1-18
Chapter 1 Financial Management and Value Creation: An Overview 1. Which of the following statements is correct in relation to how a venture is financed? a. The venture will be financed by its shareholders and by the debt holders. Cash contributed by shareholders is called debt capital, while cash contributed by lenders is equity capital. b. The venture will be financed by its shareholders and by the debt holders. Cash contributed by shareholders is called equity capital, while cash contributed by lenders is called debt capital. c. The venture will be financed only by its shareholders, through cash and profits. These sources of funds are called equity capital. d. The venture will be financed by its shareholders and by the debt holders. Profits contributed by shareholders are called equity capital, while cash contributed by lenders is called debt capital Answer: B 2. The management main objective is to: a. create value for employees, customers and suppliers. b. create value of the community. c. create value for the firm’s owners. d. create value for the government. Answer: C 3. Which of the following statements is correct? a. The firm’s shareholders invested cash in the firm and are interested in cash returns, while the debt holders invested cash in the firm and are interested in cash returns. b. The firm’s shareholders invested cash in the firm and are interested in profit returns, while the debt holders invested cash in the firm and are interested in profit returns. c. The firm’s shareholders invested cash in the firm and are interested in cash returns, while the debt holders invested cash in the firm and are interested in profit returns. d. The firm’s shareholders invested cash in the firm and are interested in profit returns, while the debt holders invested cash in the firm and are interested in cash returns. th
For use with Finance for Executives: Managing for Value Creation, 7 edition by Gabriel Hawawini and Claude Viallet, ISBN 9781473778917 © 2022 Cengage Learning EMEA