S S S S S S S S S S
ey
Fundamentals of Corporate Finance Edition 11 Brealey
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CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
S S S S S S S S S S
TRUE/FALSES-SWriteS'T'SifStheSstatementSisStrueSandS'F'SifStheSstatementSisSfalse.
1) TheSliabilitySofSsoleSproprietorsSisSlimitedStoStheSamountSofStheirSinvestmentSinStheScompany.
⊚S true
⊚S false
2) GeneralSpartnersShaveSlimitedSpersonalSliabilitySforSbusinessSdebtsSinSaSlimitedSpartnership.
⊚S true
⊚S false
3) TheSseparationSofSownershipSandSmanagementSisSoneSdistinctiveSfeatureSofScorporations.
⊚S true
⊚S false
4) ASmajorSdisadvantageSofSpartnershipsSisSthatStheyShaveSdoubleStaxationSofSprofits.
⊚S true
⊚S false
5) FinancialSassetsShaveSvalueSbecauseStheySareSclaimsSonStheSfirm'sSrealSassetsSandStheScashSthatSt
hoseSassetsSwillSproduce.
⊚S true
⊚S false
6) CapitalSbudgetingSdecisionsSareSusedStoSdetermineShowStoSraiseStheScashSnecessarySforSi
nvestments.
⊚S true
⊚S false
7) ASsuccessfulSinvestmentSisSoneSthatSincreasesStheSvalueSofStheSfirm.
⊚S true
⊚S false
8) Facebook'sSdecisionStoSspendS$700SmillionStoSacquireSInstagramSisSanSinvestmentSdecision.
⊚S true
⊚S false
9) BoardsSofSdirectorsSareSgenerallySappointedSbyStheSfirm'sSseniorSofficers.
⊚S true
⊚S false
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,ACCESS Test Bank for Fundamentals of Corporate Finance 11th EditionBreal
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ey
Fundamentals of Corporate Finance Edition 11 Brealey
S S S S S S
10) FinancialSanalystsSareSinvolvedSinSmonitoringStheSriskSassociatedSwithSinvestmentSprojectsSandS
financingSdecisions.
⊚S true
⊚S false
11) TheSprimarySgoalSofSanyScompanySshouldSbeStoSmaximizeScurrentSperiodSprofits.
⊚S true
⊚S false
12) MaximizingSprofitsSisStheSsameSasSmaximizingStheSvalueSofStheSfirm.
⊚S true
⊚S false
13) TheSDodd-
FrankSfinancialSreformSlawSinS2010SgrantedSshareholdersSaSbindingSvoteSonSexecutiveSc
ompensation.
⊚S true
⊚S false
14) SoleSproprietorshipsSfaceStheSsameSagencySproblemsSasSthoseSassociatedSwithScorporations.
⊚S true
⊚S false
15) RealSassetsScanSbeSintangibleSassets.
⊚S true
⊚S false
16) MakingSgoodSinvestmentSandSfinancingSdecisionsSisStheSchiefStaskSofStheSfinancialSmanager.
⊚S true
⊚S false
17) IfSaSproject'sSvalueSisSlessSthanSitsSrequiredSinvestment,SthenStheSprojectSisSfinanciallyS
attractive.
⊚S true
⊚S false
18) GlaxoSmithKline'sSspendingSofS$3.6SbillionSonSresearchSandSdevelopmentSofSnewSdrugsSisSaS
capitalSbudgetingSdecisionSbutSnotSaSfinancingSdecision.
⊚S true
⊚S false
VersionS1 2
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, ACCESS Test Bank for Fundamentals of Corporate Finance 11th EditionBreal
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Fundamentals of Corporate Finance Edition 11 Brealey
S S S S S S
19) Deltas'sSissuanceSofSaS$1.0SbillionSbondSisSaSfinancingSdecision.
⊚S true
⊚S false
20) AnSIOUS("ISoweSyou")SfromSyourSbrother-in-lawSisSaSfinancialSasset.
⊚S true
⊚S false
21) TheSseparationSofSownershipSandSmanagementSisSoneSdistinctiveSfeatureSofSbothScorporationsS
andSsoleSproprietors.
⊚S true
⊚S false
22) ShareholdersSwelcomeShigherSshort-termSprofitsSevenSwhenStheySdamageSlong-termSprofits.
⊚S true
⊚S false
23) ASwell-
designedScompensationSpackageScanShelpSaSfirmSachieveSitsSgoalSofSmaximizingSmarketS
value.
⊚S true
⊚S false
24) WhileScontrolSofSlargeSpublicScompaniesSinStheSUnitedSStatesSisSexercisedSthroughStheSboardSo
fSdirectorsSandSpressureSfromStheSstockSmarket;SinSmanySotherScountriesStheSstockSmarketSisSle
ssSimportantSandScontrolSshiftsStoSmajorSstockholders,StypicallySbanksSandSotherScompanies.
⊚S true
⊚S false
25) CorporateSinvestorsSareSresponsibleSforSdecidingSwhetherStoSreinvestSinStheSfirm’sSoperationsS
orStakeStheSprofitsSasSaSdistribution.
⊚S true
⊚S false
26) EstablishedSfirmsScanScreateSvalueSbySdevelopingSlong-
termSrelationshipsSandSmaintainingSaSgoodSreputation.
⊚S true
⊚S false
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