Test Bank For Corporate Finance By Jonathan Berk
& Peter Demarzo, 6th Edition| 9780137844906|
All Chapters 1-31| Latest 2026
1
© 2022 Pearson Canada Inc.
,table of contents
part 1: introduction
1. the corporation and financial markets
2. introduction to financial statement analysis
3. financial decision making and the law of one price
part 2: time, money, and interest rates
4. the time value of money
5. interest rates
6. valuing bonds
part 3: valuing projects and firms
7. investment decision rules
8. fundamentals of capital budgeting
9. valuing stocks
part 4: risk and return
10. capital markets and the pricing of risk
11. optimal portfolio choice and the capital asset pricing model
12. estimating the cost of capital
13. investor behavior and capital market efficiency
part 5: capital structure
14. capital structure in a perfect market
15. debt and taxes
16. financial distress, managerial incentives, and information
17. payout policy
part 6: advanced valuation
18. capital budgeting and valuation with leverage
19. valuation and financial modeling: a case study
part 7: options
20. financial options
21. option valuation
22. real options
part 8: long-term financing
23. raising equity capital
24. debt financing
25. leasing
part 9: short-term financing
26. working capital management
27. short-term financial planning
part 10: special topics
28. mergers and acquisitions
29. corporate governance
30. risk management
31. international corporate finance
2
© 2022 Pearson Canada Inc.
,chapter 1 the corporation
1.1 the three types of firms
1) a sole proprietorship is owned by:
A) one person
B) two or more people
C) shareholders
bankers answer: a
diff: 1 type: mc
topic: 1.1 the three types of firms
2) in canada, which of the following organization forms accounts for the greatest number
of firms?
A) limited liability partnership
B) limited partnership
C) sole proprietorship
publicly traded corporation answer: c
diff: 1 type: mc
topic: 1.1 the three types of firms
3) which of the following organization forms earns the most revenue?
A) privately owned corporation
B) limited partnership
C) publicly owned corporation
limited liability company answer: c
diff: 1 type: mc
topic: 1.1 the three types of firms
4) which of the following is not an advantage of a sole proprietorship?
A) single taxation
B) ease of setup
C) limited liability
no separation of ownership and control answer: c
diff: 2 type: mc
topic: 1.1 the three types of firms
3
© 2022 Pearson Canada Inc.
, 5) which of the following statements regarding limited partnerships is true?
A) there is no limit on a limited partner's liability.
B) a limited partner's liability is limited by the amount of his investment.
C) a limited partner is not liable until all of the assets of the general partners have
been exhausted.
a general partner's liability is limited by the amount of his investment. answer: b
diff: 2 type: mc
topic: 1.1 the three types of firms
6) which of the following is/are an advantage(s) of incorporation?
A) access to capital markets
B) limited liability
C) unlimited life
all of the above answer: d
diff: 2 type: mc
topic: 1.1 the three types of firms
7) in canada, a limited liability partnership, llp, is essentially:
A) a limited partnership without limited partners
B) a limited partnership without a general partner
C) just another name for a limited partnership
just another name for a corporation answer: b
diff: 1 type: mc
topic: 1.1 the three types of firms
8) in canada, which of the following business organization forms cannot avoid double taxation?
A) limited partnership
B) publicly traded corporation
C) privately owned corporation
limited liability company answer: b
diff: 1 type: mc
topic: 1.1 the three types of firms
9) in canada, the dividend tax credit gives some relief by:
A) effectively giving a lower tax rate on dividend income than on other sources of income
B) effectively giving a higher tax rate on dividend income than on other sources of income
C) effectively giving the same tax rate on dividend income as on other sources of income
effectively giving a tax rate of zero on dividend income compared to other sources of income
answer: a
diff: 1 type: mc
topic: 1.1 the three types of firms
4
© 2022 Pearson Canada Inc.
& Peter Demarzo, 6th Edition| 9780137844906|
All Chapters 1-31| Latest 2026
1
© 2022 Pearson Canada Inc.
,table of contents
part 1: introduction
1. the corporation and financial markets
2. introduction to financial statement analysis
3. financial decision making and the law of one price
part 2: time, money, and interest rates
4. the time value of money
5. interest rates
6. valuing bonds
part 3: valuing projects and firms
7. investment decision rules
8. fundamentals of capital budgeting
9. valuing stocks
part 4: risk and return
10. capital markets and the pricing of risk
11. optimal portfolio choice and the capital asset pricing model
12. estimating the cost of capital
13. investor behavior and capital market efficiency
part 5: capital structure
14. capital structure in a perfect market
15. debt and taxes
16. financial distress, managerial incentives, and information
17. payout policy
part 6: advanced valuation
18. capital budgeting and valuation with leverage
19. valuation and financial modeling: a case study
part 7: options
20. financial options
21. option valuation
22. real options
part 8: long-term financing
23. raising equity capital
24. debt financing
25. leasing
part 9: short-term financing
26. working capital management
27. short-term financial planning
part 10: special topics
28. mergers and acquisitions
29. corporate governance
30. risk management
31. international corporate finance
2
© 2022 Pearson Canada Inc.
,chapter 1 the corporation
1.1 the three types of firms
1) a sole proprietorship is owned by:
A) one person
B) two or more people
C) shareholders
bankers answer: a
diff: 1 type: mc
topic: 1.1 the three types of firms
2) in canada, which of the following organization forms accounts for the greatest number
of firms?
A) limited liability partnership
B) limited partnership
C) sole proprietorship
publicly traded corporation answer: c
diff: 1 type: mc
topic: 1.1 the three types of firms
3) which of the following organization forms earns the most revenue?
A) privately owned corporation
B) limited partnership
C) publicly owned corporation
limited liability company answer: c
diff: 1 type: mc
topic: 1.1 the three types of firms
4) which of the following is not an advantage of a sole proprietorship?
A) single taxation
B) ease of setup
C) limited liability
no separation of ownership and control answer: c
diff: 2 type: mc
topic: 1.1 the three types of firms
3
© 2022 Pearson Canada Inc.
, 5) which of the following statements regarding limited partnerships is true?
A) there is no limit on a limited partner's liability.
B) a limited partner's liability is limited by the amount of his investment.
C) a limited partner is not liable until all of the assets of the general partners have
been exhausted.
a general partner's liability is limited by the amount of his investment. answer: b
diff: 2 type: mc
topic: 1.1 the three types of firms
6) which of the following is/are an advantage(s) of incorporation?
A) access to capital markets
B) limited liability
C) unlimited life
all of the above answer: d
diff: 2 type: mc
topic: 1.1 the three types of firms
7) in canada, a limited liability partnership, llp, is essentially:
A) a limited partnership without limited partners
B) a limited partnership without a general partner
C) just another name for a limited partnership
just another name for a corporation answer: b
diff: 1 type: mc
topic: 1.1 the three types of firms
8) in canada, which of the following business organization forms cannot avoid double taxation?
A) limited partnership
B) publicly traded corporation
C) privately owned corporation
limited liability company answer: b
diff: 1 type: mc
topic: 1.1 the three types of firms
9) in canada, the dividend tax credit gives some relief by:
A) effectively giving a lower tax rate on dividend income than on other sources of income
B) effectively giving a higher tax rate on dividend income than on other sources of income
C) effectively giving the same tax rate on dividend income as on other sources of income
effectively giving a tax rate of zero on dividend income compared to other sources of income
answer: a
diff: 1 type: mc
topic: 1.1 the three types of firms
4
© 2022 Pearson Canada Inc.
