TRUE or FALSE
Asset 3
Directions: Write TRUE if the statement is correct or FALSE if the statement is incorrect on your answer sheet
1. To achieve the goal of profit maximization for each alternative being considered the financial manager would select
the one that is expected to result in the highest monetary return
2. Dividend payments change directly with changes in earnings per share
3. The wealth of corporate owners is measured by the share price of the stock.
4. Financial markets are intermediaries that channel the savings f individuals, businesses, and government into loans of
investments,
5. The money market involves trading of securities with matunities of one year or less while the capital market involves
the buying and selling of securities with maturities of more than one year
6. Primary and secondary markets are markets for short-term and long-term securities, respectively.
7. Financial markets are intermediaries that channel the savings of individuals, business and government into loans or
investments.
8. The money market involves trading of securities with maturities of one year or less while the capital market involves
the buying and selling of securities with maturities of more than one year
9 Holders of equity have claims on both income and assets that are secondary to the claims of creditors
10. Preferred stock is a special form of stock having a fixed periodic dividend that must be paid prior to payment of any
logy, cha
interest to outstanding bonds.
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