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True or False? 1. there are 3 basic questions addressed by a financial manager. 2. agency...

True or False?
1. there are 3 basic questions addressed by a financial manager.
2. agency problems arise in sole proprietorship and partnerships.

3. investors should buy positive value on the stock of the firms which pay no dividends.
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Answer #1

1. There are 3 basic questions addressed by a financial manager.

This statement is true.

Three basic questions addressed by a financial manager are –

· What is the best capital budgeting decisions (investment opportunities) for the company

· What capital structure is optimum for the company

· How the company is going manage its working capital

2. Agency problems arise in sole proprietorship and partnerships.

This statement is false

Agency problems are related to the separation of ownership and management and generally ownership and management are not separated in sole proprietorship and partnerships. Agency problems arise more in corporations.

3. Investors should buy positive value on the stock of the firms which pay no dividends.   

This statement is false

Investors can buy dividend paying stocks also. They have to ensure that the expected return on stock should be equal to or more than the required return by investors                                                                                                 

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