Exam 1: Corporate Finance and the Financial Manager

Stella places a market order with her broker to buy 1000 shares of OneWorld Corp.The broker buys 1000 shares at $15.40 each,and sells them to Stella at $15.55 each.He also charges a commission of $12.00.What is bid-ask spread in this case?

Both personal financial decisions and business financial decisions can best be made by applying the:

It is generally not the duty of financial managers to ensure that a firm has the cash it needs for day-to-day transactions.

Which of the following types of firms do not have limited liability?

Which of the following would be more typically the responsibility of a controller rather than a treasurer?

Why is a stock exchange like NASDAQ considered a secondary market?

You own shares in two different companies,Ace Holdings,and Beta Inc.Ace Holdings earns $6.00 per share before taxes,has a corporate tax rate of 25%,and pays out 50% of its after-tax earnings as dividends.Beta Inc.earns $4.00 per share before taxes,has a corporate tax rate of 15%,and pays out 100% of its after-tax earnings as dividends.Which company pays you a higher dividend,and by how much?

Windsor Windows earns $4.50 per share before taxes and pays a dividend of $2.00 per share.The corporate tax rate is 30%,the personal tax rate on dividends is 15%,and the personal tax rate on non-dividend income is 40%.What is the after-tax amount an individual would receive per share from the dividend?

Katie owns 12.5% of the stock of the Gimli Corporation.The tax rate on dividend income is 24%.If Gimli makes a dividend payment of $25,000,000 paid proportionally to its shareholders,how much of this amount would Katie receive after taxes?

You own 100 shares in each of two different companies,Ace Holdings,and Beta Inc.Ace Holdings earns $6.00 per share before taxes,has a corporate tax rate of 25%,and pays out 50% of its after-tax earnings as dividends.Beta Inc.earns $4.00 per share before taxes,has a corporate tax rate of 15%,and pays out 100% of its after-tax earnings as dividends.The tax rate on dividend income is 15%.If your shares of Ace Holdings are held outside of a TFSA,and your shares of Beta Inc.are held inside a TFSA,what is the total after-tax income you receive from your dividends?

What is the most common way that principal-agent problems are addressed in most corporations?

Why is it possible for a corporation to enter into contracts,acquire assets,incur obligations,and enjoy protection against the seizure of its property?

What are the main differences between the TSX and the TSX Venture Exchange?

Which type of financial institution is involved in many different aspects of the financial cycle,brokering many of the transactions that take place between institutions?

Tofino Toffee is a corporation that earned $5 per share before it paid any taxes.The firm retained $2.50 of after-tax earnings for reinvestment,and distributed what remained in dividend payments.You hold 6,000 shares of Tofino Toffee in a tax-free savings account,and 4,000 shares outside of a tax-free savings account.If the corporate tax rate was 25% and dividend earnings were taxed at 15%,what was the value of your dividend earnings received after all taxes are paid?

The shares of private corporations are traded on a stock market.

What is the most common type of firm in Canada and the world?

Over 60% of all Canadian business profit is generated by which type of firm?

Which of the following is an advantage of a sole proprietorship?

Use the figure for the question(s) below. -How much money would a stock exchange make from buying and selling 500 shares of the stock under the conditions shown above?