Test Bank for Corporate Finance, Canadian Edition, 5th Edition (Berk, DeMarzo, Stangeland)

Test TqBank Tqfor TqCorporate TqFinance, Tq5th TqEdition Tqby TqJonathan TqBerk, TqDeMarzo



Tq




Tq




TEST BANK FOR
Tq Tq


Corporate TqFinance, TqCanadian TqEdition, Tq5th Tqedition
TqBerk TqChapter Tq1-31

, Chapter Tq1 T q Tq The TqCorporation

1.1 The TqThree TqTypes Tqof TqFirms

1) A Tqsole Tqproprietorship Tqis Tqowned Tqby:
A) one Tqperson
B) two Tqor Tqmore Tqpeople
C) shareholders
D) bankers
TqAnswer:

TqA

Diff: Tq1 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

2) In TqCanada, Tqwhich Tqof Tqthe Tqfollowing Tqorganization Tqforms Tqaccounts Tqfor Tqthe Tqgreatest
Tqnumber Tqof Tqfirms?

A) Limited TqLiability TqPartnership
B) Limited TqPartnership
C) Sole TqProprietorship
D) Publicly TqTraded
TqCorporation TqAnswer: T q C

Diff: Tq1 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

3) Which Tqof Tqthe Tqfollowing Tqorganization Tqforms Tqearns Tqthe Tqmost Tqrevenue?
A) Privately TqOwned TqCorporation
B) Limited TqPartnership
C) Publicly TqOwned TqCorporation
D) Limited TqLiability
TqCompany TqAnswer: T q C

Diff: Tq1 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

4) Which Tqof Tqthe Tqfollowing Tqis TqNOT Tqan Tqadvantage Tqof Tqa Tqsole Tqproprietorship?
A) Single Tqtaxation
B) Ease Tqof Tqsetup
C) Limited Tqliability
D) No Tqseparation Tqof Tqownership Tqand
Tqcontrol TqAnswer: T q C

Diff: Tq2 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms




1|Page

, 5) Which Tqof Tqthe Tqfollowing Tqstatements Tqregarding Tqlimited Tqpartnerships Tqis TqTRUE?
A) There Tqis Tqno Tqlimit Tqon Tqa Tqlimited Tqpartner's Tqliability.
B) A Tqlimited Tqpartner's Tqliability Tqis Tqlimited Tqby Tqthe Tqamount Tqof Tqhis Tqinvestment.
C) A Tqlimited Tqpartner Tqis Tqnot Tqliable Tquntil Tqall Tqof Tqthe Tqassets Tqof Tqthe Tqgeneral Tqpartners
Tqhave Tqbeen Tqexhausted.

D) A Tqgeneral Tqpartner's Tqliability Tqis Tqlimited Tqby Tqthe Tqamount Tqof Tqhis
Tqinvestment. TqAnswer: T q B

Diff: Tq2 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

6) Which Tqof Tqthe Tqfollowing Tqis/are Tqan Tqadvantage(s) Tqof Tqincorporation?
A) Access Tqto Tqcapital Tqmarkets
B) Limited Tqliability
C) Unlimited Tqlife
D) All Tqof Tqthe
Tqabove TqAnswer:

T q D

Diff: Tq2 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

7) In TqCanada, Tqa Tqlimited Tqliability Tqpartnership, TqLLP, Tqis Tqessentially:
A) a Tqlimited Tqpartnership Tqwithout Tqlimited Tqpartners
B) a Tqlimited Tqpartnership Tqwithout Tqa Tqgeneral Tqpartner
C) just Tqanother Tqname Tqfor Tqa Tqlimited Tqpartnership
D) just Tqanother Tqname Tqfor Tqa
Tqcorporation TqAnswer: T q B

Diff: Tq1 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

8) In TqCanada, Tqwhich Tqof Tqthe Tqfollowing Tqbusiness Tqorganization Tqforms Tqcannot Tqavoid Tqdouble
Tqtaxation?

A) Limited TqPartnership
B) Publicly TqTraded TqCorporation
C) Privately TqOwned TqCorporation
D) Limited TqLiability
TqCompany TqAnswer: T q B

Diff: Tq1 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms

9) In TqCanada, Tqthe Tqdividend Tqtax Tqcredit Tqgives Tqsome Tqrelief Tqby:
A) effectively Tqgiving Tqa Tqlower Tqtax Tqrate Tqon Tqdividend Tqincome Tqthan Tqon Tqother Tqsources Tqof
Tqincome

B) effectively Tqgiving Tqa Tqhigher Tqtax Tqrate Tqon Tqdividend Tqincome Tqthan Tqon Tqother Tqsources Tqof
Tqincome

C) effectively Tqgiving Tqthe Tqsame Tqtax Tqrate Tqon Tqdividend Tqincome Tqas Tqon Tqother Tqsources Tqof
Tqincome



2|Page

, D) effectively Tqgiving Tqa Tqtax Tqrate Tqof Tqzero Tqon Tqdividend Tqincome Tqcompared Tqto Tqother Tqsources
Tqof Tqincome TqAnswer: T q A

Diff: Tq1 Type: TqMC
Topic: T q 1.1 T q The TqThree TqTypes Tqof TqFirms




3|Page