BCOR 3020 - FINAL
The Legal life of a corporation is: - ANSpermanent, regardless of current ownership
What gives a corporation its permanence? - ANSseparation of ownership and control
Which of the following best describes the concept of limited liability:
a) it protects the personal property and wealth of company owners
b) it prevents creditors from suing top management
c) it allows the owners of a company to sue its managers
d) it limits the type of offenses that a company can be used for - ANSa) it protects the personal
property and wealth of company owners
When a corporation fails, the maximum that can be lost by an individual shareholder is: -
ANSthe amount of his or her initial investment
The Term capital structure refers to: - ANSa mix of long-term debt and equity financing
One way a corporation can alter its capital structure is by:
a) not accepting any new capital budgeting projects
b) investing in intangible assets
c) issuing stock to repay debt
d) becoming a limited liability company - ANSc) issuing stock to repay debt
An example of a firm's financing decision would be:
A) deciding whether or not to increase the price of its products.
B) acquiring a competitive firm.
C) determining how much to pay for a specific asset.
D) selling new shares of stock to buy an office building. - ANSD) selling new shares of stock to
buy an office building.
Company cost of capital is best described as: - ANSthe expected return investors require to
invest money with a specific company.
Which of the following would be considered a capital budgeting decision:
A) issuing debt in the form of long-term bonds
B) spending $2 million on a new product line
C) issuing common stock rather than preferred stock
The Legal life of a corporation is: - ANSpermanent, regardless of current ownership
What gives a corporation its permanence? - ANSseparation of ownership and control
Which of the following best describes the concept of limited liability:
a) it protects the personal property and wealth of company owners
b) it prevents creditors from suing top management
c) it allows the owners of a company to sue its managers
d) it limits the type of offenses that a company can be used for - ANSa) it protects the personal
property and wealth of company owners
When a corporation fails, the maximum that can be lost by an individual shareholder is: -
ANSthe amount of his or her initial investment
The Term capital structure refers to: - ANSa mix of long-term debt and equity financing
One way a corporation can alter its capital structure is by:
a) not accepting any new capital budgeting projects
b) investing in intangible assets
c) issuing stock to repay debt
d) becoming a limited liability company - ANSc) issuing stock to repay debt
An example of a firm's financing decision would be:
A) deciding whether or not to increase the price of its products.
B) acquiring a competitive firm.
C) determining how much to pay for a specific asset.
D) selling new shares of stock to buy an office building. - ANSD) selling new shares of stock to
buy an office building.
Company cost of capital is best described as: - ANSthe expected return investors require to
invest money with a specific company.
Which of the following would be considered a capital budgeting decision:
A) issuing debt in the form of long-term bonds
B) spending $2 million on a new product line
C) issuing common stock rather than preferred stock
