Exam (elaborations)
Test Bank for Corporate Finance (Chapter 1)6th edition by Jonathan Berk
- Course
- Institution
Test Bank for Corporate Finance (Chapter 1)6th edition by Jonathan Berk
[Show more]
Content preview
Test Bank for Corporate Finance(Chapter 1)6th edition by Jonathan Berk
Capital Budgeting - ANSThe process of planning and managing a firm's longterm investments
Capital Structure - ANSThe mixture of debt and equity maintained by a firm
Sole proprietorship - ANSA business owned by a single individual
Corporation - ANSA business created as a distinct legal entity composed of one or more
individuals or entities
Agency problem - ANSThe possibility of conflict of interest between the stockholders and
management of a firm
Stakeholder - ANSSomeone other than a stockholder or creditor who potentially has a claim on
the cash flows of the firm
Sole proprietorship's advantages - ANS-Easiest to start
-Least regulated
-Taxed once on earned profits
Sole proprietorship's disadvantages - ANS-Life limited to owner's life willingness to remain in
business
-Capital and debt financing restricted to owner's personal wealth and personal contacts
-Unlimited personal liability for business suits
Partnership - ANSDirect ownership by two or more entities who enter into a contractual
relationship
General Partners - ANS-Share in profits
-Make management decisions
Limited partners - ANS-Share profits
-DO NOT make management decisions
Partnership's Advantages - ANS-More owners and larger entity size to tap a greater pool of
personal wealth and personal contacts for financing
-Taxed once on allocated earned profits
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller AllLegitExams. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
68175 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 15 years now