test bank for corporate finance canadian edition 5th edition by jonathan_berk david stangeland peter demarzo.

TesthBankhforhCorporatehFinance,h5thhEditionhbyhJonathanhBerk,hDeMarzo



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TEST BANK FOR
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CorporatehFinance,hCanadianhEdition,h5thheditionhBerkhCh
apterh1-31

,Chapterh1h h ThehCorporation

1.1 ThehThreehTypeshofhFirms

1) Ahsolehproprietorshiphishownedhby:
A) onehperson
B) twohorhmorehpeople
C) shareholders
D) bankersh
Answer:h A
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

2) InhCanada,hwhichhofhthehfollowinghorganizationhformshaccountshforhthehgreatesthnumberhofhf
irms?
A) LimitedhLiabilityhPartnership
B) LimitedhPartnership
C) SolehProprietorship
D) PubliclyhTradedhCorporationh
Answer:h C
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

3) Whichhofhthehfollowinghorganizationhformshearnshthehmosthrevenue?
A) PrivatelyhOwnedhCorporation
B) LimitedhPartnership
C) PubliclyhOwnedhCorporation
D) LimitedhLiabilityhCompanyh
Answer:h C
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

4) WhichhofhthehfollowinghishNOThanhadvantagehofhahsolehproprietorship?
A) Singlehtaxation
B) Easehofhsetup
C) Limitedhliability
D) Nohseparationhofhownershiphandhcontrolh
Answer:h C
Diff:h2 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

,5) WhichhofhthehfollowinghstatementshregardinghlimitedhpartnershipshishTRUE?
A) Therehishnohlimithonhahlimitedhpartner'shliability.
B) Ahlimitedhpartner'shliabilityhishlimitedhbyhthehamounthofhhishinvestment.
C) Ahlimitedhpartnerhishnothliablehuntilhallhofhthehassetshofhthehgeneralhpartnershhavehbeenhe
xhausted.
D) Ahgeneralhpartner'shliabilityhishlimitedhbyhthehamounthofhhishinvestment.h
Answer:h B
Diff:h2 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

6) Whichhofhthehfollowinghis/arehanhadvantage(s)hofhincorporation?
A) Accesshtohcapitalhmarkets
B) Limitedhliability
C) Unlimitedhlife
D) Allhofhthehaboveh
Answer:h D
Diff:h2 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

7) InhCanada,hahlimitedhliabilityhpartnership,hLLP,hishessentially:
A) ahlimitedhpartnershiphwithouthlimitedhpartners
B) ahlimitedhpartnershiphwithouthahgeneralhpartner
C) justhanotherhnamehforhahlimitedhpartnership
D) justhanotherhnamehforhahcorporationh
Answer:h B
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

8) InhCanada,hwhichhofhthehfollowinghbusinesshorganizationhformshcannothavoidhdoublehtaxation?
A) LimitedhPartnership
B) PubliclyhTradedhCorporation
C) PrivatelyhOwnedhCorporation
D) LimitedhLiabilityhCompanyh
Answer:h B
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

9) InhCanada,hthehdividendhtaxhcredithgiveshsomehreliefhby:
A) effectivelyhgivinghahlowerhtaxhratehonhdividendhincomehthanhonhotherhsourceshofhincome
B) effectivelyhgivinghahhigherhtaxhratehonhdividendhincomehthanhonhotherhsourceshofhincome
C) effectivelyhgivinghthehsamehtaxhratehonhdividendhincomehashonhotherhsourceshofhincome
D) effectivelyhgivinghahtaxhratehofhzerohonhdividendhincomehcomparedhtohotherhsourceshofhincomeh
Answer:h A
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

, 10) Whichhofhthehfollowinghstatementshishmosthcorrect?
A) Anhadvantagehtohincorporationhishthathithallowshforhlesshregulationhofhthehbusiness.
B) Anhadvantagehofhahcorporationhishthathithishsubjecthtohdoublehtaxation.
C) Unlikehahpartnership,hahdisadvantagehofhahcorporationhishthathithhashlimitedhliability.
D) Corporationshfacehmorehregulationshwhenhcomparedhtohpartnerships.h
Answer:h D
Diff:h2 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

11) InhCanada,hthehdistinguishinghfeaturehofhahcorporationhishthat:
A) therehishnohlegalhdifferencehbetweenhthehcorporationhandhitshowners
B) ithishahlegallyhdefined,hartificialhbeing,hseparatehfromhitshowners
C) ithspreadshliabilityhforhitshcorporatehobligationshtohallhshareholders
D) ithprovideshlimitedhliabilityhonlyhtohsmallhshareholdersh
Answer:h B
Diff:h2 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

12) Whichhofhthehfollowinghis/arehsubjecthtohdoublehtaxationhinhCanada?
A) Corporation
B) Partnership
C) Solehproprietorship
D) BothhAhandhBh
Answer:h A
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms

13) CanadahRevenuehAgency,hCRA,hallowshanhexemptionhfromhdoublehtaxationhforhcertainhflowht
hroughhentitieshwherehallhincomehproducedhbyhthehbusinesshflowshtohthehinvestorshandhvirtuallyhn
ohearningsharehretainedhwithinhthehbusiness.hThesehentitiesharehcalled:
A) CanadianhFederalhCrownhCorporations
B) CanadianhControlledhCorporations
C) IncomehTrusthCorporations
D) ForeignhControlledhCorporationsh
Answer:h C
Diff:h1 Type:hMC
Topic:h 1.1h ThehThreehTypeshofhFirms