Question : 31.What market where transactions that generate new cash flow for : 1325637

31.What market is where transactions that generate new cash flow for the firm occur?

a.Primary market transactions

b.Secondary market transactions

c.Commodities market transactions

d.Initial public offering transactions

32.Which type of finance position focuses on preparing firm financial plans and the evaluation of the firm’s financial ratios?

a.Financial analyst

b.Capital budgeting analyst

c.Cash manager

d.Portfolio manager

33.What of the following is FALSE regarding debt capital?

a.Debt holders receive interest payments at fixed intervals.

b.Debt holders receive the amount of their loan (called principal) at the debt’s maturity date.

c.Debt holders can force the firm into bankruptcy if interest payments are not made.

d.Debt holders have voting rights for the firm’s board of directors.

34.Which of the following is FALSE regarding equity capital?

a.Common stock holders bear most of the firm’s business and financial risk.

b.Preferred stock holders receive a fixed annual payment on their invested capital.

c.Common stock holders have ownership in the firm by voting for the firm’s management.

d.Preferred stockholders can force the firm into bankruptcy if dividend payments are not paid.

35.What was the key impact to the Jobs and Growth Tax Reconciliation Act of 2003?

a.It greatly reduced the risk and liability of owning a small business.

b.It provided tax credits and incentives for corporations to maintain their operations in the United States.

c.It reduced the effect of double taxation on corporate earnings by lowering the tax rate on corporate dividends.

d.It reduced taxes in an effort to keep Social Security solvent through 2040.

36.What is a fiduciary?

a.Someone who performs ratio analysis for a corporation.

b.Someone who invest and manages money on someone else’s behalf.

c.Someone who manages the release of a initial public offering.

d.Someone who evaluates the performance of individual bonds.

37.Calculate the tax disadvantage to organizing a U.S. business today, after passage of the Jobs and Growth Tax Reconciliation Act of 2003, as a corporation versus a partnership, given the following assumptions. All earnings will be paid out as dividends, and operating income before taxes will be $200,000. The effective corporate tax rate is 35%, and the tax rate on corporate dividends is 15%. The average personal tax rate for partners in the business is 35%.

a.$17,500

b.$19,500

c.$20,000

d.$22,250

38.Calculate the tax disadvantage to organizing a U.S. business today, after passage of the Jobs and Growth Tax Reconciliation Act of 2003, as a corporation versus a partnership, given the following assumptions. All earnings will be paid out as dividends, and operating income before taxes will be $750,000. The effective corporate tax rate is 35%, and the tax rate on corporate dividends is 15%. The average personal tax rate for partners in the business is 35%.

a.$63,125

b.$64,250

c.$66,000

d.$73,125

39.Calculate the tax disadvantage to organizing a U.S. business today, after passage of the Jobs and Growth Tax Reconciliation Act of 2003, as a corporation versus a partnership, given the following assumptions. All earnings will be paid out as dividends, and operating income before taxes will be $1,500,000. The effective corporate tax rate is 35%, and the tax rate on corporate dividends is 15%. The average personal tax rate for partners in the business is 35%.

a.$146,250

b.$152,250

c.$166,850

d.$170,375

40.Before passage of the Jobs and Growth Tax Reconciliation Act of 2003, some argued to completely eliminate the tax rate on dividends. Calculate the tax disadvantage to organizing a U.S. business today if the Jobs and Growth Tax Reconciliation Act of 2003 passed with this provision. Consider the following firm: All earnings will be paid out as dividends, and operating income before taxes will be $1,500,000. The effective corporate tax rate is 35%, and the tax rate on corporate dividends is 0%. The average personal tax rate for partners in the business is 35%. What is the tax disadvantage?

a.$0

b.$75,000

c.$100,000

d.$125,000