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4.(Set 2)Which one of these best fits the description of an agency cost?
increasing the dividend payments per share
the benefits received from reducing production costs per unit
the payment of interest on a firm’s debts
the payment of corporate income taxes
the payment required for an outside audit of the firm
5.The primary goal of financial management is to:
maximize current dividends per share of the existing stock.
avoid financial distress.
minimize operational costs and maximize firm efficiency.
maximize the current value per share of the existing stock.
maintain steady growth in both sales and net earnings.
6.Which one of the following business types is best suited to raising large
amounts of capital?
limited partnership
corporation
sole proprietorship
limited liability company
general partnership
7.Accounting profits and cash flows are generally:
the same since accounting profits reflect when cash flows occur.