Question :
41.What meant by the term “double taxation” as applied to : 1325638
41.What is meant by the term “double taxation” as applied to the corporate form of business organization?
a.Corporate income as taxed at twice the rate of partnership income.
b.Corporate income is taxed, and then corporate dividends are taxed as well.
c.Corporations pay both Federal income tax and state income tax on their earnings.
d.Corporations pay both income tax and sales taxes on their goods.
42.What is the proper goal for management of a firm?
a.Maximize shareholder wealth
b.Maximize net income or earnings
c.Maximize sales revenue
d.Minimize expenses
43.What is a basic guide for financial decision making?
a.Make decisions where the benefits exceed the costs.
b.Make decisions where the total benefits exceed the total costs.
c.Make decisions where the average benefits exceed the fixed costs.
d.Make decisions where the average benefits exceed the average costs.
44.What recent act has attempted to reduce the possibility of more accounting scandals in our economy?
a.Tax Relief Act of 2003
b.Internal Accounting Standards Act of 2002
c.McCain-Feingold Act of 2003
d.Sarbanes-Oxley Act of 2002
45.What is a key provision regarding CEOs in the Sarbanes-Oxley Act of 2002?
a.CEOs cannot hold options in the firms they direct.
b.CEOs total compensation cannot exceed a limit set by the SEC.
c.CEOs are personally liable for any mistakes on company financial filings.
d.CEOs are prohibited from commenting on company filings to the SEC.
46.Which of the following describes the “collective action problem”?
a.When a CEO fails to represent the interest of shareholders in daily decisions of the firm.
b.When the shareholders of a firm fail to act in their own best interests.
c.When the managers of a firm lack incentive to maximize shareholder wealth.
d.When an individual stockholder spends time and resources monitoring managers, bearing the cost, while the benefits go to all the shareholders in the firm.
47.To maximize the value of a business, a firm needs access to capital and to minimize risk for investors. Given these guidelines, which business form should maximize value for a firm?
a.Sole proprietorship
b.Limited partnership
c.General partnership
d.Corporation
48.What is the term applied to a firm that offers shares to the general public for the first time?
a.Initial Public Offering
b.Initial Placed Offering
c.Investment Plan Offer
d.Investment of Public Offers
49.Which statement best describes the capital structure decision process for a firm?
a.The firm finds the least expensive debt to finance its projects.
b.The firm finds the mix of debt and equity to maximize firm value.
c.The firm purchases the mix of debt and equity to match the guidelines of the company charter.
d.The firm makes the necessary filings for an initial public offering.
50.Which is not a duty of a financial manager?
a.Budgeting
b.Financial forecasting
c.Product research
d.Investment analysis
