This website uses cookies to ensure you have the best experience. Learn more

Corporate Finance Essay

1144 words - 5 pages

Which of the following statements is CORRECT? (Points : 5)
One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
It is generally easier to transfer one's ownership interest in a partnership than in a corporation.
One of the advantages of the corporate form of organization is that it avoids double taxation.
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."
Corporations of all types are subject to the corporate income tax.

Question 3. 3. Which of the following statements is CORRECT? (Points : 5)
...view middle of the document...

It makes the firm's investors subject to greater potential personal liabilities.
It makes it more difficult for the firm's investors to transfer their ownership interests.

Question 6. 6. Which of the following statements is CORRECT? (Points : 5)
A hostile takeover is the main method of transferring ownership interest in a corporation.
Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization.
A corporation is a legal entity that is generally created by a state, and it has a life and existence that is separate from the lives of its individual owners and managers.
Limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.
Although its stockholders are insulated by limited legal liability, the legal status of the corporation does not protect the firm's managers in the same way, i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions.

Question 7. 7. Which of the following statements is CORRECT? (Points : 5)
Most businesses (by number and total dollar sales) are organized as proprietorships or partnerships because it is easier to set up and operate in one of these forms rather than as a corporation. However, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have important tax advantages over proprietorships and partnerships.
Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of U.S. businesses (in terms of number of businesses) are organized as corporations.
Due to legal considerations related to ownership transfers and limited liability, most business (measured by dollar sales) is conducted by corporations in spite of large corporations' often less favorable tax treatment..
Large corporations are taxed more favorably than sole proprietorships.
Corporate stockholders are exposed to unlimited liability.

Question 8. 8. Which of the following statements is CORRECT? (Points : 5)
The corporate bylaws are a standard set of rules established by the state of incorporation. These rules are identical for all corporations in the state, and their purpose is to ensure that the firm's managers run the firm in accordance with state laws.
The corporate charter is a standard document prescribed by the state of incorporation, and its purpose is to ensure that the...

Other Papers Like Corporate Finance

Corporate Finance Essay

3390 words - 14 pages , L.J. (2007). Corporate Finance (pp. 250-359). Canada: Thomson South-Western. 4) Grant, T. (n.d). Debt Lender vs. Equity Investor. The Nest. Retrieved from: http://budgeting.thenest.com/debt-lender-vs-equity-investor-27622.html 5) Howell, R. (n.d). Advantages and disadvantages of Retained Earnings. Chron. Retrieved from: http://smallbusiness.chron.com/advantages-disadvantages-retained-earnings-20688.html 6) Little, K. (n.d

Introduction to Corporate Finance Essay

1958 words - 8 pages Chapter 1 Introduction to Corporate Finance Week 1 by Hee Soo Lee Learning Goals The basic types of financial management decisions and the role of the financial manager The financial implications of the different forms of business organization The goal of financial management The conflicts of interest that can arise between owners and managers The various types of financial markets      2 Chapter Structure

Corporate Finance Review Outline

923 words - 4 pages efficiency? * Weak form * Security prices reflect all information found in past prices and volume. * Implication? * Semi-strong form * Security prices reflect all publicly available information. * Strong form * Security prices reflect all information—public and private. * What are the implications of market efficiency for corporate finance? * The price of

Iag Corporate Finance Analysis

2346 words - 10 pages IAG INTERNATIONAL AIRLINES GROUP Corporate finance 2013 ------------------------------------------------- Index 1. Company profile 1. Core activities 2. Competitors 3. External finance 1. Corporate governance 4. Corporate governance 5. Compensation of member of the Board of Directors 6. Investor relation section 2. Stock price data and analysis 7. Daily stock prices

Corporate Finance Course Assignment

2280 words - 10 pages The German University in Cairo Corporate Finance Course Assignment submitted by: Mohamed Ibrahim Amin Date: May 24, 2014 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549   FORM 10-Q   (Mark One)   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |   For the quarterly period ended December 31, 2013   |  | TRANSITION REPORT PURSUANT TO

Corporate Finance Case

4887 words - 20 pages financing 10 2.5.1 Tax Advantage 10 2.5.2 Corporate Tax Rate 11 2.5.3 Credit rating 11 2.5.4 Interest rate 11 2.5.5 Company’s Industry 12 2.5.6 Company’s growth rate 12 2.5.7 Some other arguments about Harvey Norman 12 2.6 Evidence of financial distress 13 2.7 Optimal Capital Structure 14 3. Dividend Policy 15 3.1 HVN’s Dividend history 15 3.2 Competitors Dividend Analysis 16

Corporate Finance Assignment

2073 words - 9 pages taxed percentages from the dividends or capital gains. References Myers, S. C. (1984): The capital structure puzzle, The Journal of Finance 39(3), 575-592. Myers, S. C. & Majluf, N. S. (1984): Corporate financing and investment decisions when firms have information that investors do not have The Journal of Financial Economics, 13(2), 187-221

Acf 465-Applied Corporate Finance

3208 words - 13 pages LAHORE UNIVERSITY OF MANAGEMENT SCIENCES Course Outline for APPLIED CORPORATE FINANCE Instructor’s Name: Dr. Naim Sipra Room No. 161 Telephone Ext: 2161 Office Hours for students: Fridays 3-5 pm ________________________________________________________________________ Course Title APPLIED CORPORATE FINANCE Course Code ACF 465 Introduction The objective of this course is to reinforce and expand on

Intro To Corporate Finance Chap. 1

2073 words - 9 pages •Chapter 1 INTRODUCTION TO CORPORATE FINANCE GOAL Today, corporate finance managers must make decision in a much more coordinated manner and generally has direct responsibilities for a control process. Because there are financial implications in virtually all segments of business, she/he must have sufficient knowledge of finance to work these implications into the area. At

International Corporate Finance/Fin Gm571 Week 3

1782 words - 8 pages Lawrence Sports Simulation Team International Corporate Finance/FIN GM571 Alternative Working Capital Policies to Consider The short-term financing strategy Lawrence Sports (LS) is not efficacious. It is in need of improvement and is a problem that LS must consider an alternative working capital policy. The current policy places LS in an overly dependent financial position on the company’s primary customer, Mayo Stores. When Mayo

Corporate Finance

1028 words - 5 pages overhaul of finance. The direction of efforts to improve banks’ liquidity position is to encourage them to hold more deposits; the aim of bail-in legislation planned to come into force by 2018 is to make senior debt absorb losses in the event of a bank failure. The logic behind both of these reform initiatives is that bank deposits have two, contradictory properties. They are both sticky, because they are insured; and they are flighty, because they can

Related Essays

Corporate Finance Essay

2784 words - 12 pages CORPORATE GOVERNANCE CHAPTER 1 Presenter's name Presenter's title dd Month yyyy 1. INTRODUCTION WHAT IS CORPORATE GOVERNANCE? • Corporate governance is the system of principles, policies, procedures, and clearly defined responsibilities and accountabilities used by stakeholders to overcome the conflicts of interest inherent in the corporate form. Hence, the importance of understanding the different forms of business. • Corporate

Corporate Finance Essay 1674 Words

1674 words - 7 pages ). “Managerial power and rent extraction in the design of executive compensation.” University of Chicago Law Review 69, 751-846. * Berk, J., and Demarzo, P. (2007) “Corporate Finance.” Person Education, Inc. * Boundless (Online). Available at: https://www.boundless.com/finance/introduction-to-the-field-and-goals-of-financial-management/agency-and-conflicts-of-interest/managers-conflicts-with-shareholders/ (Accessed: 24 November 2013

Corporate Finance Essay 1564 Words

1564 words - 7 pages Corporate Finance 10 Problems From Chapter 1 through 10 Sorang Kim BHU MBA 671 Corporate Finace Professor Mensah Dartey April 14, 2013 Chapter 1, Problem 6 (pp. 6 ~ 8) Problem You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend

Corporate Finance Essay 1146 Words

1146 words - 5 pages .: Fundamentals Front Matter Preface © The McGraw−Hill of Corporate Finance, Sixth Companies, 2002 Edition, Alternate Edition  COMPREHENSIVE TEACHING AND LEARNING PACKAGE xvi This edition of Fundamentals has more options than ever in terms of the textbook, instructor supplements, student supplements, and multimedia products. Mix and match to create a package that is perfect for your course! Textbook As with the previous edition, we are