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

TestKBankKforKCorporateKFinance,K5thKEditionKbyKJonathanKBerk,KDeMarzo



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TEST BANK FOR
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CorporateKFinance,KCanadianKEdition,K5thKeditionKBerkKC
hapterK1-31

,ChapterK1K K TheKCorporation

1.1 TheKThreeKTypesKofKFirms

1) AKsoleKproprietorshipKisKownedKby:
A) oneKperson
B) twoKorKmoreKpeople
C) shareholders
D) bankers
KAnswer:K

A
Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

2) InKCanada,KwhichKofKtheKfollowingKorganizationKformsKaccountsKforKtheKgreatestKnumberK
ofKfirms?
A) LimitedKLiabilityKPartnership
B) LimitedKPartnership
C) SoleKProprietorship
D) PubliclyKTradedKCorporation
KAnswer:K C

Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

3) WhichKofKtheKfollowingKorganizationKformsKearnsKtheKmostKrevenue?
A) PrivatelyKOwnedKCorporation
B) LimitedKPartnership
C) PubliclyKOwnedKCorporation
D) LimitedKLiabilityKCompany
KAnswer:K C

Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

4) WhichKofKtheKfollowingKisKNOTKanKadvantageKofKaKsoleKproprietorship?
A) SingleKtaxation
B) EaseKofKsetup
C) LimitedKliability
D) NoKseparationKofKownershipKandKcontro
lKAnswer:K C
Diff:K2 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

,5) WhichKofKtheKfollowingKstatementsKregardingKlimitedKpartnershipsKisKTRUE?
A) ThereKisKnoKlimitKonKaKlimitedKpartner'sKliability.
B) AKlimitedKpartner'sKliabilityKisKlimitedKbyKtheKamountKofKhisKinvestment.
C) AKlimitedKpartnerKisKnotKliableKuntilKallKofKtheKassetsKofKtheKgeneralKpartnersKhaveKbe
enKexhausted.
D) AKgeneralKpartner'sKliabilityKisKlimitedKbyKtheKamountKofKhisKinvestmen
t.KAnswer:K B
Diff:K2 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

6) WhichKofKtheKfollowingKis/areKanKadvantage(s)KofKincorporation?
A) AccessKtoKcapitalKmarkets
B) LimitedKliability
C) UnlimitedKlife
D) AllKofKtheKabove
KAnswer:K D

Diff:K2 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

7) InKCanada,KaKlimitedKliabilityKpartnership,KLLP,KisKessentially:
A) aKlimitedKpartnershipKwithoutKlimitedKpartners
B) aKlimitedKpartnershipKwithoutKaKgeneralKpartner
C) justKanotherKnameKforKaKlimitedKpartnership
D) justKanotherKnameKforKaKcorporatio
nKAnswer:K B
Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

8) InKCanada,KwhichKofKtheKfollowingKbusinessKorganizationKformsKcannotKavoidKdoubleKtaxation?
A) LimitedKPartnership
B) PubliclyKTradedKCorporation
C) PrivatelyKOwnedKCorporation
D) LimitedKLiabilityKCompany
KAnswer:K B

Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

9) InKCanada,KtheKdividendKtaxKcreditKgivesKsomeKreliefKby:
A) effectivelyKgivingKaKlowerKtaxKrateKonKdividendKincomeKthanKonKotherKsourcesKofKincome
B) effectivelyKgivingKaKhigherKtaxKrateKonKdividendKincomeKthanKonKotherKsourcesKofKincome
C) effectivelyKgivingKtheKsameKtaxKrateKonKdividendKincomeKasKonKotherKsourcesKofKincome
D) effectivelyKgivingKaKtaxKrateKofKzeroKonKdividendKincomeKcomparedKtoKotherKsourcesKofKinco
meKAnswer:K A
Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

, 10) WhichKofKtheKfollowingKstatementsKisKmostKcorrect?
A) AnKadvantageKtoKincorporationKisKthatKitKallowsKforKlessKregulationKofKtheKbusiness.
B) AnKadvantageKofKaKcorporationKisKthatKitKisKsubjectKtoKdoubleKtaxation.
C) UnlikeKaKpartnership,KaKdisadvantageKofKaKcorporationKisKthatKitKhasKlimitedKliability.
D) CorporationsKfaceKmoreKregulationsKwhenKcomparedKtoKpartnerships
.KAnswer:K D
Diff:K2 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

11) InKCanada,KtheKdistinguishingKfeatureKofKaKcorporationKisKthat:
A) thereKisKnoKlegalKdifferenceKbetweenKtheKcorporationKandKitsKowners
B) itKisKaKlegallyKdefined,KartificialKbeing,KseparateKfromKitsKowners
C) itKspreadsKliabilityKforKitsKcorporateKobligationsKtoKallKshareholders
D) itKprovidesKlimitedKliabilityKonlyKtoKsmallKshareholder
sKAnswer:K B
Diff:K2 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

12) WhichKofKtheKfollowingKis/areKsubjectKtoKdoubleKtaxationKinKCanada?
A) Corporation
B) Partnership
C) SoleKproprietorship
D) BothKAKandKB
KAnswer:K A

Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms

13) CanadaKRevenueKAgency,KCRA,KallowsKanKexemptionKfromKdoubleKtaxationKforKcertainKflo
wKthroughKentitiesKwhereKallKincomeKproducedKbyKtheKbusinessKflowsKtoKtheKinvestorsKandKvirtu
allyKnoKearningsKareKretainedKwithinKtheKbusiness.KTheseKentitiesKareKcalled:
A) CanadianKFederalKCrownKCorporations
B) CanadianKControlledKCorporations
C) IncomeKTrustKCorporations
D) ForeignKControlledKCorporations
KAnswer:K C

Diff:K1 Type:KMC
Topic:K 1.1K TheKThreeKTypesKofKFirms