Question 1

The owners of a limited liability company prefer

Accepted Answer

A) being taxed like a corporation. 
B) having liability exposure similar to that of a sole proprietor. 
C) being taxed personally on all business income. 
D) having liability exposure similar to that of a general partner. 
E) being taxed like a corporation with liability like a partnership. 
A) being taxed like a corporation. 
B) having liability exposure similar to that of a sole proprietor. 
C) being taxed personally on all business income. 
D) having liability exposure similar to that of a general partner. 
E) being taxed like a corporation with liability like a partnership.

Question 2

The Securities Act of 1933 focuses on

Accepted Answer

A) all new and outstanding stock transactions. 
B) the issuance of new securities. 
C) the redemption of outstanding debt. 
D) insider trading. 
E) Federal Deposit Insurance Corporation (FDI
C) insurance. 
A) all new and outstanding stock transactions. 
B) the issuance of new securities. 
C) the redemption of outstanding debt. 
D) insider trading. 
E) Federal Deposit Insurance Corporation (FDI
C) insurance.

Question 3

The articles of incorporation

Accepted Answer

A) establish the rights of the shareholders. 
B) are rules that apply only to limited liability companies. 
C) address only those issues related to a corporation's managers and directors. 
D) establish the compensation to be granted to senior managers. 
E) include only the name,purpose,and intended life of the corporation. 
A) establish the rights of the shareholders. 
B) are rules that apply only to limited liability companies. 
C) address only those issues related to a corporation's managers and directors. 
D) establish the compensation to be granted to senior managers. 
E) include only the name,purpose,and intended life of the corporation.

Question 4

Which one of the following is least apt to convince managers to work in the best interest of the current stockholders?

Accepted Answer

A) Receiving a bonus based on company profits 
B) Receiving stock options 
C) Being threatened with a proxy fight 
D) Receiving a bonus based on company size 
E) Receiving company shares based on increases in share value 
A) Receiving a bonus based on company profits 
B) Receiving stock options 
C) Being threatened with a proxy fight 
D) Receiving a bonus based on company size 
E) Receiving company shares based on increases in share value

Question 5

Which one of the following is least apt to encourage managers to act in the best interest of shareholders?

Accepted Answer

A) Shareholder election of the board of directors,who in turn select managers 
B) Threat of a takeover by another firm 
C) Linking manager compensation to share value 
D) Compensating managers with fixed salaries 
E) Granting stock options to key managers 
A) Shareholder election of the board of directors,who in turn select managers 
B) Threat of a takeover by another firm 
C) Linking manager compensation to share value 
D) Compensating managers with fixed salaries 
E) Granting stock options to key managers

Question 6

Which one of the following statements is correct?

Accepted Answer

A) All types of business formations have limited lives. 
B) Partnerships are the most complicated type of business to form. 
C) Sole proprietorships and partnerships are taxed in a similar fashion. 
D) General partnerships and corporations provide limited liability for all owners. 
E) Both partnerships and corporations incur double taxation. 
A) All types of business formations have limited lives. 
B) Partnerships are the most complicated type of business to form. 
C) Sole proprietorships and partnerships are taxed in a similar fashion. 
D) General partnerships and corporations provide limited liability for all owners. 
E) Both partnerships and corporations incur double taxation.

Question 7

Which form of business structure faces the greatest agency problems?

Accepted Answer

A) Sole proprietorship 
B) General partnership 
C) Limited partnership 
D) Limited liability company 
E) Corporation 
A) Sole proprietorship 
B) General partnership 
C) Limited partnership 
D) Limited liability company 
E) Corporation

Question 8

A limited partnership generally

Accepted Answer

A) has less of an ability to raise capital than a proprietorship. 
B) has 10 or more limited partners and no general partners. 
C) permits limited partners to sell their ownership interest without the partnership terminating. 
D) is taxed the same as a corporation. 
E) provides for the transfer of a general partner's ownership interest to any outside party. 
A) has less of an ability to raise capital than a proprietorship. 
B) has 10 or more limited partners and no general partners. 
C) permits limited partners to sell their ownership interest without the partnership terminating. 
D) is taxed the same as a corporation. 
E) provides for the transfer of a general partner's ownership interest to any outside party.

Question 9

Which one of the following statements is correct concerning corporations?

Accepted Answer

A) The shareholders of a corporation select the top managers of that corporation. 
B) A corporation is a distinct legal entity. 
C) The stockholders are usually the managers of a corporation. 
D) The ability of a corporation to raise capital is quite limited. 
E) The income of a corporation is taxed as personal income of the stockholders. 
A) The shareholders of a corporation select the top managers of that corporation. 
B) A corporation is a distinct legal entity. 
C) The stockholders are usually the managers of a corporation. 
D) The ability of a corporation to raise capital is quite limited. 
E) The income of a corporation is taxed as personal income of the stockholders.

Question 10

Which position is generally directly responsible for financial planning and capital expenditures?

Accepted Answer

A) Controller 
B) Treasurer 
C) Director 
D) Chairman of the board 
E) Chief operations officer 
A) Controller 
B) Treasurer 
C) Director 
D) Chairman of the board 
E) Chief operations officer

Question 11

Which one of the following statements is correct concerning the organizational structure of a corporation?

Accepted Answer

A) The vice president of finance reports to the chairman of the board. 
B) The chief operations officer reports to the chief executive officer. 
C) The controller reports to the president. 
D) The treasurer reports to the chief executive officer. 
E) The chief operations officer reports to the vice president of production. 
A) The vice president of finance reports to the chairman of the board. 
B) The chief operations officer reports to the chief executive officer. 
C) The controller reports to the president. 
D) The treasurer reports to the chief executive officer. 
E) The chief operations officer reports to the vice president of production.

Question 12

Which one of these parties cannot be a stakeholder of a firm?

Accepted Answer

A) Newly hired company employee 
B) Government 
C) Firm's creditors 
D) Business located next door to the firm 
E) Firm's customers 
A) Newly hired company employee 
B) Government 
C) Firm's creditors 
D) Business located next door to the firm 
E) Firm's customers

Question 13

A stakeholder is best described as any

Accepted Answer

A) person or entity owning shares of corporate stock. 
B) person or entity having voting rights based on stock ownership. 
C) current manager who was involved in a firm's creation. 
D) creditor to whom the firm currently owes money. 
E) person or entity,other than a stockholder or creditor,who potentially has a claim on a firm's cash. 
A) person or entity owning shares of corporate stock. 
B) person or entity having voting rights based on stock ownership. 
C) current manager who was involved in a firm's creation. 
D) creditor to whom the firm currently owes money. 
E) person or entity,other than a stockholder or creditor,who potentially has a claim on a firm's cash.

Question 14

The division of profits and losses among the members of a partnership is formalized in the

Accepted Answer

A) indemnity clause. 
B) partnership agreement. 
C) statement of purpose. 
D) indenture contract. 
E) group charter. 
A) indemnity clause. 
B) partnership agreement. 
C) statement of purpose. 
D) indenture contract. 
E) group charter.

Question 15

The decisions made by financial managers should all be ones that increase the

Accepted Answer

A) size of the firm. 
B) growth rate of the firm. 
C) market value of the existing owners' equity. 
D) marketability of the managers. 
E) financial distress of the firm. 
A) size of the firm. 
B) growth rate of the firm. 
C) market value of the existing owners' equity. 
D) marketability of the managers. 
E) financial distress of the firm.

Question 16

Which one of these is an intangible asset?

Accepted Answer

A) Building 
B) Machinery 
C) Vehicle 
D) Loan 
E) Trademark 
A) Building 
B) Machinery 
C) Vehicle 
D) Loan 
E) Trademark

Question 17

Short-term finance

Accepted Answer

A) ensures sufficient equipment is available to produce the daily amount of product desired. 
B) ensures that long-term debt is acquired at the lowest possible cost. 
C) ensures that dividends are paid to all stockholders on an annual basis. 
D) balances the amount of company debt to the amount of available equity. 
E) is concerned with managing net working capital. 
A) ensures sufficient equipment is available to produce the daily amount of product desired. 
B) ensures that long-term debt is acquired at the lowest possible cost. 
C) ensures that dividends are paid to all stockholders on an annual basis. 
D) balances the amount of company debt to the amount of available equity. 
E) is concerned with managing net working capital.

The owners of a limited liability company prefer

The Securities Act of 1933 focuses on

The articles of incorporation

Which one of the following is least apt to convince managers to work in the best interest of the current stockholders?

Which one of the following is least apt to encourage managers to act in the best interest of shareholders?

Which one of the following statements is correct?

Which form of business structure faces the greatest agency problems?

A limited partnership generally

Which one of the following statements is correct concerning corporations?

Which position is generally directly responsible for financial planning and capital expenditures?

Which one of the following statements is correct concerning the organizational structure of a corporation?

Which one of these parties cannot be a stakeholder of a firm?

A stakeholder is best described as any

The division of profits and losses among the members of a partnership is formalized in the

The decisions made by financial managers should all be ones that increase the

Which one of these is an intangible asset?

Short-term finance

Financial Statements and Cash Flow

Financial Statements Analysis and Financial Models

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Stock Valuation

Net Present Value and Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, and Capital Budgeting

Risk and Return: Lessons From Market History

Return and Risk: The Capital Asset Pricing Model Capm

Risk, Cost of Capital, and Valuation

Efficient Capital Markets and Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Dividends and Other Payouts

Options and Corporate Finance

Short-Term Finance and Planning

Raising Capital

International Corporate Finance

Mergers and Acquisitions Web Only

Filters

Exam 1: Introduction to Corporate Finance

The owners of a limited liability company prefer

The Securities Act of 1933 focuses on

The articles of incorporation

Which one of the following is least apt to convince managers to work in the best interest of the current stockholders?

Which one of the following is least apt to encourage managers to act in the best interest of shareholders?

Which one of the following statements is correct?

Which form of business structure faces the greatest agency problems?

A limited partnership generally

Which one of the following statements is correct concerning corporations?

Which position is generally directly responsible for financial planning and capital expenditures?

Which one of the following statements is correct concerning the organizational structure of a corporation?

Which one of these parties cannot be a stakeholder of a firm?

A stakeholder is best described as any

The division of profits and losses among the members of a partnership is formalized in the

The decisions made by financial managers should all be ones that increase the

Which one of these is an intangible asset?

Short-term finance

Financial Statements and Cash Flow

Financial Statements Analysis and Financial Models

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Stock Valuation

Net Present Value and Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, and Capital Budgeting

Risk and Return: Lessons From Market History

Return and Risk: The Capital Asset Pricing Model Capm

Risk, Cost of Capital, and Valuation

Efficient Capital Markets and Behavioral Challenges

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Dividends and Other Payouts

Options and Corporate Finance

Short-Term Finance and Planning

Raising Capital

International Corporate Finance

Mergers and Acquisitions Web Only

Filters