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TEST BANK
Corporate Finance
Jonathan Berk
6th edition
All Chapters Complete (Questions with Verified Answers)
,@ProfdocDigitalLibraries <Best Online Study Materials>
Table of Contents
Part 1 — Introduction
1. The Corporation and Financial Markets
2. Introduction to Financial Statement Analysis
3. Financial Decision Making and the Law of One Price
Part 2 — Time, Money, and Interest Rates
4. The Time Value of Money
5. Interest Rates
6. Valuing Bonds
Part 3 — Valuing Projects and Firms
7. Investment Decision Rules
8. Fundamentals of Capital Budgeting
9. Valuing Stocks
Part 4 — Risk and Return
10. Capital Markets and the Pricing of Risk
11. Optimal Portfolio Choice and the Capital Asset Pricing Model
12. Estimating the Cost of Capital
13. Investor Behavior and Capital Market Efficiency
Part 5 — Capital Structure
14. Capital Structure in a Perfect Market
15. Debt and Taxes
16. Financial Distress, Managerial Incentives, and Information
17. Payout Policy
Part 6 — Advanced Valuation
18. Capital Budgeting and Valuation with Leverage
19. Valuation and Financial Modelling: A Case Study
Part 7 — Options
20. Financial Options
21. Option Valuation
22. Real Options
Part 8 — Long-Term Financing
23. Raising Equity Capital
24. Debt Financing
25. Leasing
Part 9 — Short-Term Financing
26. Working Capital Management
27. Short-Term Financial Planning
Part 10 — Special Topics
28. Mergers and Acquisitions
29. Corporate Governance
30. Risk Management
31. International Corporate Finance
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Chapter 1 The Corporation and Financial Markets
1.1 The Three Types of Firms
1) A sole proprietorship is owned by:
A) one person.
B) two or more people.
C) shareholders.
D) bankers. Answer: A
Diff: 1 Type: MC
Topic : 1.1 The Three Types of Firms
2) Which of the following organization forms is the most common in the economy?
A) Limited Liability Partnership
B) Limited Partnership
C) Sole Proprietorship
D) Publicly Traded Corporation Answer: C
Diff: 1 Type: MC
Topic : 1.1 The Three Types of Firms
3) Which of the following organization forms earns the most revenue?
A) Privately Owned Corporation
B) Limited Partnership
C) Publicly Owned Corporation
D) Limited Liability Company Answer: C
Diff: 1 Type: MC
Topic : 1.1 The Three Types of Firms
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4) Which of the following is NOT an advantage of a sole proprietorship?
A) Single taxation
B) Ease of setup
C) Limited liability
D) No separation of ownership and control Answer: C
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
5) Which of the following statements regarding limited partnerships is true?
A) There is no limit on a limited partner's liability.
B) A limited partner's liability is limited by the amount of his investment.
C) A limited partner is not liable until all of the assets of the general partners have been
exhausted.
D) A general partner's liability is limited by the amount of his investment. Answer: B
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
6) Which of the following are advantages of incorporation?
A) Access to capital markets
B) Limited liability
C) Unlimited life
D) All of the above Answer: D
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
7) In Canada, a limited liability partnership, LLP, is essentially:
A) a limited partnership without limited partners.
B) a limited partnership without a general partner.
C) just another name for a limited partnership.
D) just another name for a corporation. Answer: B
TEST BANK
Corporate Finance
Jonathan Berk
6th edition
All Chapters Complete (Questions with Verified Answers)
,@ProfdocDigitalLibraries <Best Online Study Materials>
Table of Contents
Part 1 — Introduction
1. The Corporation and Financial Markets
2. Introduction to Financial Statement Analysis
3. Financial Decision Making and the Law of One Price
Part 2 — Time, Money, and Interest Rates
4. The Time Value of Money
5. Interest Rates
6. Valuing Bonds
Part 3 — Valuing Projects and Firms
7. Investment Decision Rules
8. Fundamentals of Capital Budgeting
9. Valuing Stocks
Part 4 — Risk and Return
10. Capital Markets and the Pricing of Risk
11. Optimal Portfolio Choice and the Capital Asset Pricing Model
12. Estimating the Cost of Capital
13. Investor Behavior and Capital Market Efficiency
Part 5 — Capital Structure
14. Capital Structure in a Perfect Market
15. Debt and Taxes
16. Financial Distress, Managerial Incentives, and Information
17. Payout Policy
Part 6 — Advanced Valuation
18. Capital Budgeting and Valuation with Leverage
19. Valuation and Financial Modelling: A Case Study
Part 7 — Options
20. Financial Options
21. Option Valuation
22. Real Options
Part 8 — Long-Term Financing
23. Raising Equity Capital
24. Debt Financing
25. Leasing
Part 9 — Short-Term Financing
26. Working Capital Management
27. Short-Term Financial Planning
Part 10 — Special Topics
28. Mergers and Acquisitions
29. Corporate Governance
30. Risk Management
31. International Corporate Finance
,@ProfdocDigitalLibraries <Best Online Study Materials>
Chapter 1 The Corporation and Financial Markets
1.1 The Three Types of Firms
1) A sole proprietorship is owned by:
A) one person.
B) two or more people.
C) shareholders.
D) bankers. Answer: A
Diff: 1 Type: MC
Topic : 1.1 The Three Types of Firms
2) Which of the following organization forms is the most common in the economy?
A) Limited Liability Partnership
B) Limited Partnership
C) Sole Proprietorship
D) Publicly Traded Corporation Answer: C
Diff: 1 Type: MC
Topic : 1.1 The Three Types of Firms
3) Which of the following organization forms earns the most revenue?
A) Privately Owned Corporation
B) Limited Partnership
C) Publicly Owned Corporation
D) Limited Liability Company Answer: C
Diff: 1 Type: MC
Topic : 1.1 The Three Types of Firms
, @ProfdocDigitalLibraries <Best Online Study Materials>
4) Which of the following is NOT an advantage of a sole proprietorship?
A) Single taxation
B) Ease of setup
C) Limited liability
D) No separation of ownership and control Answer: C
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
5) Which of the following statements regarding limited partnerships is true?
A) There is no limit on a limited partner's liability.
B) A limited partner's liability is limited by the amount of his investment.
C) A limited partner is not liable until all of the assets of the general partners have been
exhausted.
D) A general partner's liability is limited by the amount of his investment. Answer: B
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
6) Which of the following are advantages of incorporation?
A) Access to capital markets
B) Limited liability
C) Unlimited life
D) All of the above Answer: D
Diff: 2 Type: MC
Topic : 1.1 The Three Types of Firms
7) In Canada, a limited liability partnership, LLP, is essentially:
A) a limited partnership without limited partners.
B) a limited partnership without a general partner.
C) just another name for a limited partnership.
D) just another name for a corporation. Answer: B
