©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
HFt 4464 Exam 1 Questions With Correct
Answers 100% Verified.
The share holders of a corporation have unlimited liability - Answer✔False
Preferred stock is a security that has the features of both debt and equity - Answer✔False
The goal of hospitality financial management is to maximize the wealth of the owners. -
Answer✔True
The value of dividends is not affected by the date the are received. - Answer✔False
A good example of an agency relationship in a hotel is the relationship between a bartender
and a server. - Answer✔False
Financial management is the process of classifying financial information. - Answer✔False
The earnings of a firm are not equivalent to its cash flows. - Answer✔True
The three major decision in financial management involve investing, financing, and the
payment of dividends. - Answer✔True
Financial management cannot be related to other functional areas of management such as
marketing. - Answer✔False
The most common form of business organization in the United States is the sole proprietorship.
- Answer✔True
Sole Proprietorship - Answer✔Advantages:
Easy to form, greater control, and single taxation.
Disadvantages:
Unlimited Liability and difficulty raising capital
Partnership - Answer✔Advantages:
Easy to form, greater control, and single taxation.
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
Disadvantages:
Unlimited liability and difficulty raising capital
Limited Liability partnership - Answer✔Advantages:
Easy to form, limited liability, and single taxation.
Disadvantages:
Difficult to raise capital and short lifetime
Corporation - Answer✔Advantages:
Unlimited Life, limited liability, easy to raise capital.
Disadvantages:
Hard to form, increased regulation, double taxation (taxed on both corporate and personal
level)
Limited Liability Company (LLC) - Answer✔Advantages:
Easy to form and limited liability.
Disadvantages:
Finite Life and restrictions on transferability
Subchapter S Corporation - Answer✔Advantages:
Single taxation and limited liability
Disadvantages:
Increased regulation and restrictions on formation
Limited Liability Partnership has limited liabilities for all partners - Answer✔False
At least one of the owners is considered a general partner who makes business decisions and is
personally liable for business debts.
Common stock - Answer✔Has voting rights and can receive dividends
Preferred stock - Answer✔Have priority for dividends and no voting rights
Has a fixed dividend and is callable (can be repurchased by company)
Bonds - Answer✔Paid interest before stockholders and limited influence on corporation
Receive interest payments every six months
Receive original amount company borrowed from them when note matures
2|Page
HFt 4464 Exam 1 Questions With Correct
Answers 100% Verified.
The share holders of a corporation have unlimited liability - Answer✔False
Preferred stock is a security that has the features of both debt and equity - Answer✔False
The goal of hospitality financial management is to maximize the wealth of the owners. -
Answer✔True
The value of dividends is not affected by the date the are received. - Answer✔False
A good example of an agency relationship in a hotel is the relationship between a bartender
and a server. - Answer✔False
Financial management is the process of classifying financial information. - Answer✔False
The earnings of a firm are not equivalent to its cash flows. - Answer✔True
The three major decision in financial management involve investing, financing, and the
payment of dividends. - Answer✔True
Financial management cannot be related to other functional areas of management such as
marketing. - Answer✔False
The most common form of business organization in the United States is the sole proprietorship.
- Answer✔True
Sole Proprietorship - Answer✔Advantages:
Easy to form, greater control, and single taxation.
Disadvantages:
Unlimited Liability and difficulty raising capital
Partnership - Answer✔Advantages:
Easy to form, greater control, and single taxation.
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
Disadvantages:
Unlimited liability and difficulty raising capital
Limited Liability partnership - Answer✔Advantages:
Easy to form, limited liability, and single taxation.
Disadvantages:
Difficult to raise capital and short lifetime
Corporation - Answer✔Advantages:
Unlimited Life, limited liability, easy to raise capital.
Disadvantages:
Hard to form, increased regulation, double taxation (taxed on both corporate and personal
level)
Limited Liability Company (LLC) - Answer✔Advantages:
Easy to form and limited liability.
Disadvantages:
Finite Life and restrictions on transferability
Subchapter S Corporation - Answer✔Advantages:
Single taxation and limited liability
Disadvantages:
Increased regulation and restrictions on formation
Limited Liability Partnership has limited liabilities for all partners - Answer✔False
At least one of the owners is considered a general partner who makes business decisions and is
personally liable for business debts.
Common stock - Answer✔Has voting rights and can receive dividends
Preferred stock - Answer✔Have priority for dividends and no voting rights
Has a fixed dividend and is callable (can be repurchased by company)
Bonds - Answer✔Paid interest before stockholders and limited influence on corporation
Receive interest payments every six months
Receive original amount company borrowed from them when note matures
2|Page
