Exam 6: Firms, the Stock Market, and Corporate Governance

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Of the types of business organizations in the United States,corporations account for ________ percentage of revenues and ________ percentage of profits.

(Multiple Choice)
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A higher bond price indicates a lower cost of new external funds.

(True/False)
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Assume you and your cousin Vinny set up a partnership and your lawyer tells you that as the owners you will each face unlimited liability.What does that mean?

(Multiple Choice)
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Kendrick wants to start a tax preparation company and is going to his bank to borrow $50,000.This is an example of

(Multiple Choice)
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What does unlimited liability mean?

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Jack Dorsey is the Chief Executive Officer of Twitter as well as a member of Twitter's board of directors.Dorsey is therefore classified as an

(Multiple Choice)
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Explicit costs are nonmonetary costs.

(True/False)
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Which of the following statements is true?

(Multiple Choice)
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If a corporation's retained earnings are expected to create future profits,the market price of the firm's stock will ________ and create a ________ for stockholders if the stock is sold.

(Multiple Choice)
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A member of a corporate board of directors that does not have a direct management role in the firm is known as

(Multiple Choice)
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If a company pays a dividend of $5 to be received one year from now,dividends are expected to grow at a rate of 8 percent per year for the indefinite future,and the interest rate is 14 percent,the price of the company's stock should be ________ per share.

(Multiple Choice)
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The legislation passed in 2010 that was intended to reform regulation of the financial system was the

(Multiple Choice)
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The only type of business that faces limited liability is a partnership.

(True/False)
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On a balance sheet,a company's accounts receivable are listed as

(Multiple Choice)
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If a dollar today will likely have more purchasing power because of inflation,then a dollar a year from now ________ a dollar today.

(Multiple Choice)
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Assets minus liabilities equals

(Multiple Choice)
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A partnership can raise funds for expansion in which of the following ways?

(Multiple Choice)
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When a business is set up as a partnership,the owners of the business face limited liability.

(True/False)
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Garrison is the chief financial officer (CFO)of the Colorado Drone manufacturing company and is also on the company's board of directors.Garrison is considered ________ of the company.

(Multiple Choice)
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What is the difference between economic profit and accounting profit?

(Essay)
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