FIN 534 Quiz (15 Questions with Correct Answers)

FIN 534 Quiz (15 Questions with Correct Answers)

FIN/534 Quiz (15 Questions with Correct Answers)

1. Which of the following statements is CORRECT?

Answer

One disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than partners.

There is no good reason to expect a firm’s stockholders and bondholders to react differently to the types of new asset investments a firm makes.

Bondholders are generally more willing than stockholders to have managers invest in risky projects with high potential returns as opposed to safer projects with lower expected returns.

Stockholders are generally more willing than bondholders to have managers invest in risky projects with high potential returns as opposed to safer projects with lower expected returns.

Relative to sole proprietorships, corporations generally face fewer regulations, and this makes it easier for corporations to raise capital.

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