 |  Financial Management 30 Flashcards |  Start |
 | What is the primary objective of financial management? |  Card: 1 / 30 |
| The primary objective of financial management is to maximize shareholder's wealth through optimal capital structure and proper utilization of funds. | Card: 2 / 30 |
| Fill in the blanks: Financial management is concerned with the planning, raising, controlling, and administering of funds used in the ___. | Card: 3 / 30 |
| Business | Card: 4 / 30 |
| True or False: The safety of funds in financial management refers to minimizing the chances of risk in investments. | Card: 5 / 30 |
| True | Card: 6 / 30 |
| What must be maintained to ensure smooth operations of a business? | Card: 7 / 30 |
| An adequate and regular supply of funds. | Card: 8 / 30 |
| Fill in the blank: A sound and economical combination of shares and debentures is necessary to maintain ___ capital structure. | Card: 9 / 30 |
| Optimum | Card: 10 / 30 |
| Investment decisions can be classified into two categories: ___ and ___. | Card: 11 / 30 |
| Long-term and short-term. | Card: 12 / 30 |
| Riddle: I am a financial decision that determines how a company raises funds. I can involve debt or equity. What am I? | Card: 13 / 30 |
| Financing decision. | Card: 14 / 30 |
| Fill in the blank: The risk associated with borrowed funds is known as ___ risk. | Card: 15 / 30 |
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| Financial. | Card: 16 / 30 |
| What distinguishes owner’s funds from borrowed funds in financing decisions? | Card: 17 / 30 |
| Owner’s funds have no fixed repayment commitment, while borrowed funds must be repaid at a fixed time and incur interest regardless of profit. | Card: 18 / 30 |
| What are the main factors that influence financing decisions in a business? | Card: 19 / 30 |
| The main factors include cost, risk, flotation costs, cash flow position, control considerations, state of capital markets, and the period of finance. | Card: 20 / 30 |
| Fill in the blank: If existing shareholders want to retain complete control of the business, they should raise finance through ___ funds. | Card: 21 / 30 |
| Borrowed | Card: 22 / 30 |
| Riddle: I can help you grow, but too much of me can lead to trouble. I have a cost, and I often need to be repaid. What am I? | Card: 23 / 30 |
| Debt | Card: 24 / 30 |
| During a boom in the capital markets, which type of finance is easier to raise by issuing shares? | Card: 25 / 30 |
| Equity finance. | Card: 26 / 30 |
| What is the relationship between the state of capital markets and the ease of raising finance? | Card: 27 / 30 |
| During a boom, it is easier to raise finance through equity, while during a depression, it is easier to raise finance through debt. | Card: 28 / 30 |
| Fill in the blank: The decision regarding how much profit to distribute as dividends and how much to retain should focus on maximizing ___ wealth. | Card: 29 / 30 |
| Shareholder | Card: 30 / 30 |
| Completed! Keep practicing to master all of them. |  Restart |
