Corporate Finance Quiz With Answers

Corporate Finance Quiz With Answers In most corporations, the CFO ranks under the CEO. a. True b. False - Answer- a The Chairman of the Board must also be the CEO. a. True b. False - Answer- b The board of directors is the highest ranking body in a corporation, and the chairman of the board is the highest ranking individual. The CEO generally works under the board and its chairman, and the board generally has the authority to remove the CEO under certain conditions. The CEO, however, cannot remove the board, but he or she can endeavor to have the board voted out and a new board voted in should a conflict arise. It is possible for a person to simultaneously serve as CEO and chairman of the board, though many corporate control experts believe it is bad to vest both offices in the same person. a. True b. False - Answer- a Partnerships and proprietorships generally have a tax advantage over corporations. a. True b. False - Answer- a A disadvantage of the corporate form of organization is that corporate stockholders are more exposed to personal liabilities in the event of bankruptcy than are investors in a typical partnership. a. True b. False - Answer- b An advantage of the corporate form of organization is that corporations are generally less highly regulated than proprietorships and partnerships. a. True b. False - Answer- b Some partners in a partnership may have different rights, privileges, and responsibilities than other partners. a. True b. False - Answer- a One advantage of the corporate form of organization is that it avoids double taxation. a. True b. False - Answer- b It is generally harder to transfer one's ownership interest in a partnership than in a corporation. a. True b. False - Answer- a One danger of starting a proprietorship is that you may be exposed to personal liability if the business goes bankrupt. This problem would be avoided if you formed a corporation to operate the business. a. True