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Towson Univer impersonatey Department of Finance Principles of Financial Management (FIN331) Spring 2010 test I Name_____________________________ ID#_________________ 1.Which of the adjacent statements is CORRECT? a. one(a) of the improvements of the corporate form of placement is that it avoids manifold appraiseation. b.It is easier to transfer ones ownership provoke in a partnership than in a corporation. c.One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. d.One of the advantages of a corporation from a social standpoint is that each sh beowner has equal voting rights, i.e., one person, one vote. e. Corporations of all told types are subject to the corporate income tax. serve: c 2. Which of the following is non to turn to the agency conflict between shareholders and managers? a. Maximize sales b. admo nisher managers activities c. Give incentives based on performance d. Offer stock shares or stock options e. Hostile takeover threat set: a 3. What is the main advantage of S-corp relative to C-corp? a. Profit mete b. Single taxation c. Limited liability d.

Dividend policy e. slap-up structure Answer: b S-corp Distribution is taxed only at once at personal income tax rate. In other words, a single taxation 4.Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders? a.Dec rease the function of restrictive covenants! in perplex agreements. b.Take actions that reduce the possibility of a hostile takeover. c. prefer a board of directors that allows managers greater freedom of action. d.Increase the comparison of executive compensation that comes from stock options and reduce the harmonise that is compensable as cash salaries. e.Eliminate a requirement...If you want to sit a full essay, order it on our website: OrderEssay.net

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