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Test Bank for Corporate Finance, Canadian Edition 5th Edition by Jonathan Berk, David Stangeland, Peter DeMarzo

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Test Bank for Corporate Finance, Canadian Edition 5th Edition by Jonathan Berk, David Stangeland, Peter DeMarzo

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Institution Corporate Finance, Canadian Edition 5th Edition

Course Corporate Finance, Canadian Edition 5th Edition

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Test Bank for Corporate Finance 5ce 5th Canadian Edition by Jonathan Berk, Peter DeMarzo; David A. Stangeland. Chapter 1 The Corporation and Financial Markets Chapter 2 Introduction to Financial Statement Analysis Chapter 3 Arbitrage and Financial Decision Making Chapter 4 The Time Value of Money Chapter 5 Interest Rates Chapter 6 Valuing Bonds Chapter 7 Valuing Stocks Chapter 8 Investment Decision Rules Chapter 9 Fundamentals of Capital Budgeting Chapter 10 Capital Markets and the Pricing of Risk Chapter 11 Optimal Portfolio Choice and the Capital Asset Pricing Model Chapter 12 Estimating the Cost of Capital Chapter 13 Investor Behaviour and Capital Market Efficiency Chapter 14 Financial Options Chapter 15 Option Valuation Chapter 16 Real Options Chapter 17 Capital Structure in a Perfect Market Chapter 18 Debt and Taxes Chapter 19 Financial Distress, Managerial Incentives, and Information Chapter 20 Payout Policy Chapter 21 Capital Budgeting and Valuation with Leverage Chapter 22 Valuation and Financial Modeling: A Case Study Chapter 23 Raising Equity Capital Chapter 24 Debt Financing Chapter 25 Leasing Chapter 26 Working Capital Management Chapter 27 Short-Term Financial Planning Chapter 28 Mergers and Acquisitions Chapter 29 Corporate Governance Chapter 30 Risk Management Chapter 31 International Corporate Finance

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TEST BANK FOR CORPORATE ff ff ff

ff FINANCE,CANADIAN EDITION, 5TH ff ff

EDITION BERK ff ff

Chapter 1-31 ff

Chapter 1 ff The Corporation ff

1.1 The Three Types of Firms
ff ff ff ff

1) A sole proprietorship is owned by:
ff ff ff ff ff

A) one person ff

B) two or more people
ff ff ff

C) shareholders
D) bankers
Answer:
ff

A
Diff: 1 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

2) In Canada, which of the following organization forms accounts for the greatest
ff ff ff ff ff ff ff ff ff ff ff

number of firms?
ff ff ff

A) Limited Liability Partnership ff ff

B) Limited Partnership ff

C) Sole Proprietorshipff

D) PubliclyTraded Corporation f f

Answer: C
ff f f

Diff: 1 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

3) Which of the following organization forms earns the most revenue?
ff ff ff ff ff ff ff ff ff

A) Privately Owned Corporation ff ff

B) Limited Partnership ff

C) Publicly Owned Corporation ff ff

D) Limited LiabilityCompany bb f

Answer: C
ff f f

Diff: 1 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

4) Which of the following is NOT an advantage of a sole proprietorship?
ff ff ff ff ff ff ff ff ff ff ff

A) Single taxation ff

1
© 2022 Pearson Canada
ff ff ff

Inc.

,B) Ease of setup
ff ff

C) Limited liability ff

D) No separation of ownership and control
ff ff ff ff ff

Answer: C
ff f f

Diff: 2 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

2
© 2022 Pearson Canada
ff ff ff

Inc.

,5) Which of the following statements regarding limited partnerships is TRUE?
ff ff ff ff ff ff ff ff ff

A) There is no limit on a limited partner's liability.
ff ff ff ff ff ff ff ff

B) A limited partner's liability is limited by the amount of his investment.
ff ff ff ff ff ff ff ff ff ff ff

C) A limited partner is not liable until all of the assets of the general partners
ff ff ff ff ff ff ff ff ff ff ff ff ff ff

have been exhausted.
ff ff ff

D) A general partner's liabilityis limited by the amount of his
ff ff ff f ff ff ff ff ff ff

investment. Answer: B
ff ff f f

Diff: 2 Type: MC ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

6) Which of the following is/are an advantage(s) of incorporation?
ff ff ff ff ff ff ff ff

A) Access to capital markets ff ff ff

B) Limited liability ff

C) Unlimited life ff

D) All ofthe above f f f

Answer: D
ff f f

Diff: 2 Type: MC ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

7) In Canada, a limited liability partnership, LLP, is essentially:
ff ff ff ff ff ff ff ff

A) a limited partnership without limited partners
ff ff ff ff ff

B) a limited partnership without a general partner
ff ff ff ff ff ff

C) just another name for a limited partnership
ff ff ff ff ff ff

D) just another name for a corporation
ff ff ff ff ff

Answer: B
ff f f

Diff: 1 Type: MC ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

8) In Canada, which of the following business organization forms cannot avoid double
ff ff ff ff ff ff ff ff ff ff ff

taxation?
ff

A) Limited Partnership ff

B) Publicly Traded Corporation ff ff

C) Privately Owned Corporation ff ff

D) Limited LiabilityCompany bb f

Answer: B
ff f f

Diff: 1 Type: MC ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

9) In Canada, the dividend tax credit gives some relief by:
ff ff ff ff ff ff ff ff ff

A) effectively giving a lower tax rate on dividend income than on other sources of income
ff ff ff ff ff ff ff ff ff ff ff ff ff ff

B) effectively giving a higher tax rate on dividend income than on other sources of income
ff ff ff ff ff ff ff ff ff ff ff ff ff ff

C) effectively giving the same tax rate on dividend income as on other sources of income
ff ff ff ff ff ff ff ff ff ff ff ff ff ff

D) effectively giving a tax rate of zero on dividend income compared to other sources
ff ff ff ff ff ff ff ff ff ff ff ff ff

of income Answer: A
ff ff ff f f

Diff: 1 Type: MC ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

3
© 2022 Pearson Canada
ff ff ff

Inc.

, 10) Which of the following statements is most correct?
ff ff ff ff ff ff ff

A) An advantage to incorporation is that it allows for less regulation of the business.
ff ff ff ff ff ff ff ff ff ff ff ff ff

B) An advantage of a corporation is that it is subject to double taxation.
ff ff ff ff ff ff ff ff ff ff ff ff

C) Unlike a partnership, a disadvantage of a corporation is that it has limited liability.
ff ff ff ff ff ff ff ff ff ff ff ff ff

D) Corporations face more regulations when compared to partnerships. ff ff ff ff ff ff ff

Answer: D
ff f f

Diff: 2 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

11) In Canada, the distinguishing feature of a corporation is that:
ff ff ff ff ff ff ff ff ff

A) there is no legal difference between the corporation and its owners
ff ff ff ff ff ff ff ff ff ff

B) it is a legally defined, artificial being, separate from its owners
ff ff ff ff ff ff ff ff ff ff

C) it spreads liability for its corporate obligations to all shareholders
ff ff ff ff ff ff ff ff ff

D) it provides limited liability only to small shareholders
ff ff ff f ff ff ff

Answer: B
ff f f

Diff: 2 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

12) Which of the following is/are subject to double taxation in Canada?
ff ff ff ff ff ff ff ff ff ff

A) Corporation
B) Partnership
C) Sole proprietorship
ff

D) Both AandB f f f

Answer: A
ff f f

Diff: 1 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

13) Canada Revenue Agency, CRA, allows an exemption from double taxation for certain
ff ff ff ff ff ff ff ff ff ff ff

f flow through entities where all income produced by the business flows to the investors
f ff ff ff ff ff ff ff ff ff ff ff ff ff

and virtually no earnings are retained within the business. These entities are called:
ff ff ff ff ff ff ff ff ff ff ff ff ff

A) Canadian Federal Crown Corporations ff ff ff

B) Canadian Controlled Corporations ff ff

C) Income Trust Corporations ff ff

D) Foreign Controlled Corporations ff ff

Answer: C
ff f f

Diff: 1 Type: MC
ff ff

Topic: 1.1 The Three Types of Firms ff ff ff ff

4
© 2022 Pearson Canada
ff ff ff

Inc.

Connected book

JONATHAN. STANGELAND BERK (DAVID. DEMARZO, PETER.) CORPORATE FINANCE, FIFTH CANADIAN EDITION.

Publisher: 2021 ISBN: 9780136648802 Edition: Unknown

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Number of pages: 982
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