FINA403-16T NET
Practice Final
Assessment
Answer all
questions
1.
When
does Principle Agent (PA)) occur?
a.
When
agents pursue the goals of the principle rather than their own goals.
b.
When
agents pursue their own goals rather than the goals of the principle.
c.
When
firmâs owner pursue the goals of the principle rather than their own goals.
d.
When
firmâs owner pursue their own goals rather than the goals of the principle.
2.
There
are many aspects of board composition relating to firm performance. One of the
aspects is about board demographics. Which one cannot be considered as board
demographics?
a.
Board
size
b.
Board
committees
c.
Board
independence
d.
Board
point of view
3.
Tobin’s
Q to measure?
a.
Market
value
b.
Employment
rate
c.
Inflation
rate
d.
GDP
4.
Agency cost is least likely to varywith?
a.
Type of industry
b.
Size of business
c.
Life of business
d.
Number of customers
5.
Which
statement is not true?
a.
SMEs
in New Zealand play an important role in contributing economic growth.
b.
More
than 97% of New Zealand enterprises are SMEs.
c.
New
Zealand government supports the growth of SMEs, so SMEs in New Zealand do not
have to pay tax.
d.
SMEs
in New Zealand play an important role in employing people employment rate.
6.
Which
one is not regarded as the business environment?
a.
Regulation
b.
Marketing
growth
c.
Technology
development
d.
Religion
7.
Which
one is an intangible asset to be incorporated in the estimation of business
value?
a.
Cash
on deposit
b.
Goodwill
c.
Land
and buildings
d.
Stock
and plant
8.
Which
ratio is most appropriate to measure how much assetscontribute to the return of
an SMEs?
a. ROA
b. ROE
c. The percentage changed in total asset
d. Current ratio
9.
According
to the paper âBoard Structure, ownership structure and firm performance: A
study of New Zealand listed- firmsâ, which one is dependent variable?
a.
Number
of directors on the board
b.
Firm
size
c.
Firm
performance
d.
Industry
level
10.
Which
one is not adescriptive shown in Board Structure, ownership structure and
firm performance: A study of New Zealand listed- firmsâ
a.
Mean
b.
Median
c.
Correlation
coefficient
d.
Standard
deviation
11.
From
a financial perspective, which is not regarded as corporate stakeholder?
a.
Intellectual
property
b.
Creditor
c.
Investor
d.
Employee
12.
Which
one is not a limiting factor for SMEs compared to larger firms?
a.
Opportunity
to get information
b.
Ability
to get financial support
c.
Competitive
ability
d.
Opportunity
to have diversified ownership
13.
Which
group will benefit from higher performing SMEs?
a.
Individual
SMEs
b.
Countryâs
economics
c.
Society
and local community
d.
All
above
14.
Which
one is not a primary goal of SMEs?
a.
To
decrease debt
b.
To maximize
shareholder value
c.
To increase
sale growth
d.
To sustain
business survival
15.
Looking
at the Correlation Coefficient in âBoard Structure, ownership structure and
firm performance: A study of New Zealand listed- firms, which one show the
inversecorrelation with low level of statistical significance?
a. Relationship between female director and ROAÃ -0.00229
b. Relationship between block holder ownership and ROAÃ -0.1221
c. Relationship between board size and ROAÃ 0.0172
d. Relationship between inside ownership and ROAÃ 0.0107
16.
Which
one is not a direct advantage for SMEs from using bank loans?
a.
Tax deductibility
b.
Increase
corporate liquidity
c.
Ability
to expand market share
d.
Building
trust with competitors
17.
When
considering lending to an SME which item is not typically considered?
a.
Accounting
beta
b.
Size
of SMEs
c.
Competitive
plans of SMEsâ owners
d.
Financial
statement of individual SMEs
18. According
to article âDoes one size fit all? An empirical investigation of board
structure on family firmsâ financial performanceâ, which one do not decrease
financial performance in family firms?
a.
Working year of family firm
b.
Board openness to non-family members
c.
Board diversity
d.
Insider ownership
19. According
to the article âDoes one size fit all? An empirical investigation of board
structure on family firmsâ financial performanceâ, what is the relationship
between board of family firm and financial performance?
a. Family
firms with large corporate board increase financial performance.
b. Family
firms with small corporate board increase financial performance.
c.
Family firms with large corporate board do not have any
relationship with financial performance.
d.
Family firms with small corporate board do not have any
relationship with financial performance.
20. Firm
performance can be analysed by looking at many factors, which in list below is
least likely to be useful?
a.
Return on Equity
b.
Return on Asset
c.
Return on Debt
d.
Return on Capital
21.
Define
SMEs, in New Zealand, by reference to accepted numbers and relevant metrics.
22.
Discuss
business valuation method, which are normally used to evaluate SMEs.
23.
When
are business valuations required?
.
24.
Discuss how accounting beta is likely to be
impacted by high leverage and high fixed costs.
25.
Explain
the issues involved in determining the most appropriate discount rate to use in
an SMEâs DCF calculation.
26.
Discuss
the positive and negative impacts of inflation on SMEs?
27.
Evaluate
the benefit of having higher debt level in SMEs?
.
28.
Discuss
factors that are correlated with positive financial performance in âBoard Structure, ownership structure and
firm performance: A study of New Zealand listed- firmsâ
29.
What
role is fulfilled by Director of an SME?
30.
What
are the pros and cons of a large board for an SME?
31.
What
is the advantages of having women on boards of SMEs?
32.
Explain
how corporate governance is important to SMEs thinking of an IPO
33.
What
are the sources of agency problems in SMEs?
34.
What does concentrated ownership mean in SMEs?
35. Tobinâs Q is used to indicate firm performance in âBoard
structure, ownership structure and firm performance: A study of New Zealand
firmâ. It is found thatthe mean value of firm performance is 0.1293 with minimum value is
0.0001, and the maximum value is 8.4280. Please give the explanation of this
result.
36.
How
does PP Agency cost apply to SMEs?
37.
What
are the main sources of finance that SMEs in New Zealand can access?
38.
Why
would an SME choose to approach a nonbank for a loan?
39.
Explain
whether there is a clear relationship between SMEâs risk and interest rate
charged by a bank.
.
40.
According
to the stewardship theory, what is the relationship between family members and
firm performance?
41.
The
value of business merely depends on the size of business.
Answer:
42.
For
SMEs, the amount of future business profit depends on many factors such as the
ownersâ knowledge, abilities and business contacts.
Answer:
43.
In
small firms, the conflict between the majority shareholders and minority
shareholders in organization can generate principle agency problem.
Answer:
.
44.
Capital
structure of an SME normally is usually measured by debt and equity including
quasi equity.
Answer:
45.
Firms
which have gender diversity on board always have higher performance than those
which have only one gender working as the board members.
Answer:
46.
Agency
problem is not a significant issue in a firm with single owner and employed
manager.
Answer:
47.
Free
cash flow is estimated as EBIT less depreciation and plus amortisations
Answer:False
48.
In
order to obtain bank finance, SMEs may be asked to provide collateral, which
can only come from a member of the Board.
Answer:
49. Correlation
coefficient is used to examine the relationship between only two variables.
Answer:
50. The
ownership structures among SMEs differ across firms because of differences in
the circumstances facing
Answer: