Questions from Corporate Finance


Q: Explain why total financial assets in the economy must equal total financial

Explain why total financial assets in the economy must equal total financial liabilities?

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Q: Define book-value accounting and market-value accounting?

Define book-value accounting and market-value accounting?

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Q: What does it mean when a company’s return on assets (ROA

What does it mean when a company’s return on assets (ROA) is equal to its return on equity (ROE)?

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Q: Why don’t small businesses make greater use of the direct credit markets

Why don’t small businesses make greater use of the direct credit markets since these markets enable firms to finance their activities at a very low cost?

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Q: What is the difference between stockholders and stakeholders?

What is the difference between stockholders and stakeholders?

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Q: Suppose that a group of accountants wants to start an accounting business

Suppose that a group of accountants wants to start an accounting business. What organizational form would they most likely choose, and why?

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Q: Why would the owners of a business choose to form a corporation

Why would the owners of a business choose to form a corporation even though they will face double taxation?

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Q: What are two basic services that investment banks provide in the economy

What are two basic services that investment banks provide in the economy?

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Q: Explain what you would assume the yield curve would look like during

Explain what you would assume the yield curve would look like during economic expansion and why?

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Q: Why are taxes and the tax code important for managerial decision making

Why are taxes and the tax code important for managerial decision making?

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