FINC 5310 Quiz 1 Questions with Correct Answers| Latest Update Guaranteed Success
Which of the following statements is CORRECT?
A. All corporations other than non-profit corporations are subject to corporate income taxes,
which are 15% for the lowest amounts of income and 35% for the highest amounts of income.
B. The income of certain small corporations that qualify under the Tax Code is completely
exempt from corporate income taxes. Thus, the federal government receives no tax revenue
from these businesses.
C. All businesses, regardless of their legal form of organization, are taxed under the Business
Tax Provisions of the Internal Revenue Code.
D. Small businesses that qualify under the Tax Code can elect not to pay corporate taxes, but
then their owners must report their pro rata shares of the firm's income as personal income
and pay taxes on that income.
E. Congress recently changed the tax laws to make dividend income received by individuals
exempt from income taxes. Prior to the enactme D. Small businesses that qualify under the
Tax Code can elect not to pay corporate taxes, but then their owners must report their pro rata
shares of the firm's income as personal income and pay taxes on that income.
Which of the following statements is CORRECT?
A. The financial manager's proper goal should be to attempt to maximize the firm's expected
cash flows, since that will add the most to the individual shareholders' wealth.
B. The financial manager should seek that combination of assets, liabilities, and capital that will
generate the largest expected projected after-tax income over the relevant time horizon,
generally the coming year.
, C. The riskiness inherent in a firm's earnings per share (EPS) depends on the characteristics of
the projects the firm selects, and thus on the firm's assets. However, EPS is not affected by the
manner in which those assets are financed.
D. Potential agency problems can arise between managers and stockholders, because managers
hired as agents to act on behalf of the owners may instead make decisions favorable to
themselves rather than the stockholders.
E. Large, publicly owned firms li D. Potential agency problems can arise between managers
and stockholders, because managers hired as agents to act on behalf of the owners may instead
make decisions favorable to themselves rather than the stockholders.
Which of the following statements is CORRECT?
A. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to
unlimited liability.
B. It is generally easier to transfer one's ownership interest in a partnership than in a
corporation.
C. One of the advantages of the corporate form of organization is that it avoids double taxation.
D. One of the advantages of a corporation from a social standpoint is that every stockholder has
equal voting rights, i.e., "one person, one vote."
E. Corporations of all types are subject to the corporate income tax. A. One of the
disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
Which of the following statements is CORRECT?
Which of the following statements is CORRECT?
A. All corporations other than non-profit corporations are subject to corporate income taxes,
which are 15% for the lowest amounts of income and 35% for the highest amounts of income.
B. The income of certain small corporations that qualify under the Tax Code is completely
exempt from corporate income taxes. Thus, the federal government receives no tax revenue
from these businesses.
C. All businesses, regardless of their legal form of organization, are taxed under the Business
Tax Provisions of the Internal Revenue Code.
D. Small businesses that qualify under the Tax Code can elect not to pay corporate taxes, but
then their owners must report their pro rata shares of the firm's income as personal income
and pay taxes on that income.
E. Congress recently changed the tax laws to make dividend income received by individuals
exempt from income taxes. Prior to the enactme D. Small businesses that qualify under the
Tax Code can elect not to pay corporate taxes, but then their owners must report their pro rata
shares of the firm's income as personal income and pay taxes on that income.
Which of the following statements is CORRECT?
A. The financial manager's proper goal should be to attempt to maximize the firm's expected
cash flows, since that will add the most to the individual shareholders' wealth.
B. The financial manager should seek that combination of assets, liabilities, and capital that will
generate the largest expected projected after-tax income over the relevant time horizon,
generally the coming year.
, C. The riskiness inherent in a firm's earnings per share (EPS) depends on the characteristics of
the projects the firm selects, and thus on the firm's assets. However, EPS is not affected by the
manner in which those assets are financed.
D. Potential agency problems can arise between managers and stockholders, because managers
hired as agents to act on behalf of the owners may instead make decisions favorable to
themselves rather than the stockholders.
E. Large, publicly owned firms li D. Potential agency problems can arise between managers
and stockholders, because managers hired as agents to act on behalf of the owners may instead
make decisions favorable to themselves rather than the stockholders.
Which of the following statements is CORRECT?
A. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to
unlimited liability.
B. It is generally easier to transfer one's ownership interest in a partnership than in a
corporation.
C. One of the advantages of the corporate form of organization is that it avoids double taxation.
D. One of the advantages of a corporation from a social standpoint is that every stockholder has
equal voting rights, i.e., "one person, one vote."
E. Corporations of all types are subject to the corporate income tax. A. One of the
disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
Which of the following statements is CORRECT?
