Test Bank for Corporate Finance, 6th Canadian Edition by Jonathan Berk, Peter DeMarzo - All Chapters 1 to 31 |bComplete Solution | Grade A+

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, Test Bank for Corporate Finance, 6th Canadian Edition by
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Jonathan Berk, Peter DeMarzo - Complete Chapters
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vv Included (Chap 1 to 31) A+ vv vv vv vv vv




Chapter 1 gg The Corporation and Financial Markets
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1.1 The Three Types of Firms
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1) A sole proprietorship is owned by:
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A) one person.gg




B) two or more people.
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C) shareholders.
D) bankers. Answer: gg




A Diff: 1 Type: MC
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Topic : 1.1gg gg The Three Types of Firms
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2) Which of the following organization forms is the most common in the
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economy?
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A) Limited Liability Partnership
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B) Limited Partnership gg




C) Sole Proprietorship
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D) Publicly Traded Corporation Answer:
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gg C Diff: 1Type: MC
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Topic : 1.1gg gg The Three Types of Firms
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3) Which of the following organization forms earns the most revenue?
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A) Privately Owned Corporationgg gg




B) Limited Partnership gg




C) Publicly Owned Corporation
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D) Limited Liability Company Answer:
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gg C Diff: 1Type: MC
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Topic : 1.1gg gg The Three Types of Firms
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,4) Which of the following is NOT an advantage of a sole proprietorship?
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A) Single taxation gg




B) Ease of setup gg gg




C) Limited liability gg




D) No separation of ownership and control Answer:
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C Diff: 2 Type: MC
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Topic : 1.1 gg gg The Three Types of Firms
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5) Which of the following statements regarding limited partnerships is true?
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A) There is no limit on a limited partner's liability.
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B) A limited partner's liability is limited by the amount of his investment.
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C) A limited partner is not liable until all of the assets of the general
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partners have been exhausted.
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D) A general partner's liability is limited by the amount of his
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gg investment. Answer: B Diff: 2 g g gg gg gg Type: MC gg




Topic : 1.1 gg gg The Three Types of Firms
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6) Which of the following are advantages of incorporation?
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A) Access to capital markets gg gg gg




B) Limited liability gg




C) Unlimited life gg




D) All of the above Answer:
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gg D Diff: 2
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Topic : 1.1 gg gg The Three Types of Firms
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7) In Canada, a limited liability partnership, LLP, is essentially:
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A) a limited partnership without limited partners.
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B) a limited partnership without a general partner.
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C) just another name for a limited partnership.
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D) just another name for a corporation. Answer: B
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, Diff: 1 gg g g Type: MC gg




Topic : 1.1 gg gg The Three Types of Firms
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8) In Canada, which of the following business organization forms cannot
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gg avoid double taxation?
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A) Limited Partnership gg




B) Publicly Traded Corporation gg g g




C) Privately Owned Corporation gg gg




D) Limited Liability Company Answer: gg gg gg




gg B Diff: 1Type: MC
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Topic : 1.1 gg g g The Three Types of Firms
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9) In Canada, the dividend tax credit gives some relief by effectively giving:
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A) a lower tax rate on dividend income than on other sources of income.
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B) a higher tax rate on dividend income than on other sources of income.
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C) the same tax rate on dividend income as on other sources of income.
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D) a tax rate of zero on dividend income compared to other sources of
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gg income. Answer: A Diff: 1 gg gg gg gg Type: MC gg




Topic : 1.1 gg gg The Three Types of Firms
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10) Which of the following statements is most correct?
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A) An advantage to incorporation is that it allows for less business regulation.
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B) An advantage of a corporation is that it is subject to double taxation.
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C) Unlike a partnership, a disadvantage of a corporation is that it has limited
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liability.
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D) Corporations face more regulations when compared to partnerships.
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gg Answer: D Diff: 2 gg g g gg Type: MC gg




Topic : 1.1 gg gg The Three Types of Firms
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11) In Canada, the distinguishing feature of a corporation is that:
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A) there is no legal difference between the corporation and its owners.
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B) it is a legally defined, artificial being, separate from its owners.
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