Question 1

A disadvantage of the corporate structure is that it ________.

Accepted Answer

A)  limits the business's ability to raise capital 
B)  limits the liquidity that businesses have 
C)  increases the risk of conducting business 
D)  involves strict reporting requirements 
E)  imposes unlimited liability on the owners 
A)  limits the business's ability to raise capital 
B)  limits the liquidity that businesses have 
C)  increases the risk of conducting business 
D)  involves strict reporting requirements 
E)  imposes unlimited liability on the owners

Question 2

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

Accepted Answer

A)  Management is less likely to lose control of operations in corporations than proprietorships and partnerships. 
B)  Reporting requirements of corporations are simpler than sole proprietorships and partnerships. 
C)  Forming corporations involves less cost over sole proprietorships and partnerships. 
D)  Investments in corporations have more liquidity than partnerships and sole proprietorships. 
E)  Corporations have a less complex structure compared to sole proprietorships and partnerships. 
A)  Management is less likely to lose control of operations in corporations than proprietorships and partnerships. 
B)  Reporting requirements of corporations are simpler than sole proprietorships and partnerships. 
C)  Forming corporations involves less cost over sole proprietorships and partnerships. 
D)  Investments in corporations have more liquidity than partnerships and sole proprietorships. 
E)  Corporations have a less complex structure compared to sole proprietorships and partnerships.

Question 3

A corporation itself has limited liability on its transactions.

Accepted Answer

A) True 
 B)False

Question 4

RDS Bank has been making losses for many years now.The company's management wants to continue with the same style of operations,whereas many shareholders demand a change in management.A majority of shareholders unite and vote against the management's wish to sell the company to a larger counterpart subject to pressures from an external buyer.This is an example of a(n)________.

Accepted Answer

A)  forced joint venture 
B)  hostile takeover 
C)  strategic alliance 
D)  majority merger 
E)  operational alliance 
A)  forced joint venture 
B)  hostile takeover 
C)  strategic alliance 
D)  majority merger 
E)  operational alliance

Question 5

Select an organization of your choice.Construct a model that shows the corporate governance structure of the organization.

Accepted Answer

The students should identify a company a

Question 6

Which of the following is a key difference between a master limited partnership (MLP)and other forms of partnerships?

Accepted Answer

A)  A MLP allows partnerships to sell units of ownership to the general public. 
B)  Other partnerships should have more members than an MLP. 
C)  Other partnerships have double-taxation disadvantage unlike an MLP. 
D)  A MLP allows the partners to have limited liability on their investments. 
E)  A MLP is characterized by double taxation unlike the other forms of partnerships. 
A)  A MLP allows partnerships to sell units of ownership to the general public. 
B)  Other partnerships should have more members than an MLP. 
C)  Other partnerships have double-taxation disadvantage unlike an MLP. 
D)  A MLP allows the partners to have limited liability on their investments. 
E)  A MLP is characterized by double taxation unlike the other forms of partnerships.

Question 7

Eurotec,a manufacturer of security systems in Italy,merges with a company in China to expand its reach.This is an example of a ________ merger.

Accepted Answer

A)  product-extension 
B)  vertical 
C)  conglomerate 
D)  retail 
E)  market-extension 
A)  product-extension 
B)  vertical 
C)  conglomerate 
D)  retail 
E)  market-extension

Question 8

A company that is incorporated in one state (frequently the state of Delaware,where incorporation laws are more lenient)but that does business in several other states where it is registered is called a(n)________.

Accepted Answer

A)  foreign corporation 
B)  domestic corporation 
C)  global corporation 
D)  alien corporation 
E)  international corporation 
A)  foreign corporation 
B)  domestic corporation 
C)  global corporation 
D)  alien corporation 
E)  international corporation

Question 9

In a(n)________,one company simply buys a controlling interest in the voting stock of another company.

Accepted Answer

A)  limited partnership 
B)  consolidation 
C)  acquisition 
D)  joint venture 
E)  strategic alliance 
A)  limited partnership 
B)  consolidation 
C)  acquisition 
D)  joint venture 
E)  strategic alliance

Question 10

A public corporation refers to a corporation ________.

Accepted Answer

A)  that is allowed to sell stock only to a limited number of investors 
B)  whose stock is sold to general people 
C)  that is owned solely by the federal government 
D)  that is owned solely by state/federal government 
E)  whose stock is not traded in stock exchanges or other markets 
A)  that is allowed to sell stock only to a limited number of investors 
B)  whose stock is sold to general people 
C)  that is owned solely by the federal government 
D)  that is owned solely by state/federal government 
E)  whose stock is not traded in stock exchanges or other markets

Question 11

Integral Solutions is a firm that offers open source enterprise software services to small and medium companies.The company had a public issue two years ago and the company has shown significant growth in the current financial year.A major rival is silently amassing the company's shares to acquire majority stake in the company.In order to prevent this,the company issues shares to current shareholders at prices below the market value.This tactic used by Integral Solutions to prevent a takeover is an example of a ________.

Accepted Answer

A)  poison pill defense 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight tactic 
A)  poison pill defense 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight tactic

Question 12

RSS Bank is registered as a corporation in Maryland.Apart from its financial objectives,the company has also formed a legal requirement to work for the welfare of the elderly citizens in the state.The bank is obligated to work for the cause even if there is a change in ownership.Based on this information,it can be concluded that RSS bank is a(n)________.

Accepted Answer

A)  public corporation 
B)  benefit corporation 
C)  unlimited company 
D)  S corporation 
E)  not-for-profit company 
A)  public corporation 
B)  benefit corporation 
C)  unlimited company 
D)  S corporation 
E)  not-for-profit company

Question 13

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

Accepted Answer

A)  Owners receive tax exemptions when a business is a sole proprietorship. 
B)  It helps proprietors file taxes separately from their personal income. 
C)  It is easy to establish and requires less paperwork than other structures. 
D)  Owner's risk is limited to the extent he/she has invested in the business. 
E)  Risk associated with sole proprietorship is less compared to other structures. 
A)  Owners receive tax exemptions when a business is a sole proprietorship. 
B)  It helps proprietors file taxes separately from their personal income. 
C)  It is easy to establish and requires less paperwork than other structures. 
D)  Owner's risk is limited to the extent he/she has invested in the business. 
E)  Risk associated with sole proprietorship is less compared to other structures.

Question 14

A(n)________ has most of the attributes of a regular corporation but adds the legal requirement that the company must also pursue a stated non-financial goal.

Accepted Answer

A)  limited liability corporation 
B)  general partnership 
C)  S corporation 
D)  sole proprietorship 
E)  benefit corporation 
A)  limited liability corporation 
B)  general partnership 
C)  S corporation 
D)  sole proprietorship 
E)  benefit corporation

Question 15

Which of the following is a document that authorizes another person to vote on behalf of a shareholder in a corporation?

Accepted Answer

A)  agency agreement 
B)  proxy 
C)  draft 
D)  affidavit 
E)  share certificate 
A)  agency agreement 
B)  proxy 
C)  draft 
D)  affidavit 
E)  share certificate

Question 16

With the ________,a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.

Accepted Answer

A)  poison pill defense 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight tactic 
A)  poison pill defense 
B)  proxy fight 
C)  direct offer 
D)  tender offer 
E)  white knight tactic

Question 17

Strategic alliances are ________.

Accepted Answer

A)  internal agreements formed between the subsidiaries of a company 
B)  not helpful when a company has to gain credibility in a new field 
C)  a means of permanently integrating two companies in a business 
D)  an alternative to mergers and acquisitions with less risk and work 
E)  not helpful when a company's aim is expanding its market presence 
A)  internal agreements formed between the subsidiaries of a company 
B)  not helpful when a company has to gain credibility in a new field 
C)  a means of permanently integrating two companies in a business 
D)  an alternative to mergers and acquisitions with less risk and work 
E)  not helpful when a company's aim is expanding its market presence

Question 18

Profits of sole proprietorships ________.

Accepted Answer

A)  reach shareholders through intermediaries 
B)  flow directly to the owners 
C)  are considered fixed assets 
D)  are taxed at corporate rates 
E)  are subject to double taxation 
A)  reach shareholders through intermediaries 
B)  flow directly to the owners 
C)  are considered fixed assets 
D)  are taxed at corporate rates 
E)  are subject to double taxation

Question 19

Government agencies require publicly traded companies to publish extensive and detailed financial reports.

Accepted Answer

A) True 
 B)False

Question 20

What is shareholder activism?

Accepted Answer

Shareholder activism refers to activitie

A disadvantage of the corporate structure is that it ________.

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

A corporation itself has limited liability on its transactions.

Select an organization of your choice.Construct a model that shows the corporate governance structure of the organization.

Which of the following is a key difference between a master limited partnership (MLP)and other forms of partnerships?

Eurotec,a manufacturer of security systems in Italy,merges with a company in China to expand its reach.This is an example of a ________ merger.

A company that is incorporated in one state (frequently the state of Delaware,where incorporation laws are more lenient)but that does business in several other states where it is registered is called a(n)________.

In a(n)________,one company simply buys a controlling interest in the voting stock of another company.

A public corporation refers to a corporation ________.

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

A(n)________ has most of the attributes of a regular corporation but adds the legal requirement that the company must also pursue a stated non-financial goal.

Which of the following is a document that authorizes another person to vote on behalf of a shareholder in a corporation?

With the ________,a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.

Strategic alliances are ________.

Profits of sole proprietorships ________.

Government agencies require publicly traded companies to publish extensive and detailed financial reports.

What is shareholder activism?

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters

Exam 5: Forms of Ownership

A disadvantage of the corporate structure is that it ________.

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

A corporation itself has limited liability on its transactions.

Select an organization of your choice.Construct a model that shows the corporate governance structure of the organization.

Which of the following is a key difference between a master limited partnership (MLP)and other forms of partnerships?

Eurotec,a manufacturer of security systems in Italy,merges with a company in China to expand its reach.This is an example of a ________ merger.

A company that is incorporated in one state (frequently the state of Delaware,where incorporation laws are more lenient)but that does business in several other states where it is registered is called a(n)________.

In a(n)________,one company simply buys a controlling interest in the voting stock of another company.

A public corporation refers to a corporation ________.

Which of the following is a key advantage of incorporating a business as a sole proprietorship?

A(n)________ has most of the attributes of a regular corporation but adds the legal requirement that the company must also pursue a stated non-financial goal.

Which of the following is a document that authorizes another person to vote on behalf of a shareholder in a corporation?

With the ________,a third company is invited to acquire a company that is in danger of being swallowed up in a hostile takeover.

Strategic alliances are ________.

Profits of sole proprietorships ________.

Government agencies require publicly traded companies to publish extensive and detailed financial reports.

What is shareholder activism?

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters