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Written: Jan 16, 2013 9:46 PM - Jan 16, 2013 10:49 PM
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Question 1| | 10 / 10 points|
According to the book, the primary goal of a publicly-owned firm interested in serving its stockholders should be to: | | Maximize expected total corporate profit.|
| | Maximize expected EPS.|
| | Minimize the chances of losses.|
| | Maximize the stock price per share.|
| | Maximize expected net income.|
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| Good Job. |

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Question 2| | 10 / 10 points|
The major advantage of a regular partnership or a corporation as a form of business is the fact that both offer their owners limited liability, whereas proprietorships do not. | | True|
| | False|
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| see page 6-7Correct. |

Question 3| | 0 / 10 points|
A hostile takeover is a method of seizing control of a company and involves an action taken against the opposition of incumbent management. However, this action is typically motivated by a desire to control the firm's assets and is rarely motivated by a low share price. | | True|

| | False|
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| A hostile takeover is an acquisition of a firm despite resistance by the target firm's management and board of directors. It involves an unsolicited bid for the target firm and/or a proxy contest. Both of these events require direct communication with the target's shareholders. While price always matters in a takeover, the bidding firm often makes a very high (pre-emptive) bid in order to encourage cooperation by the target firm's shareholders.|

Question 4| | 10 / 10 points|
Which of the following statements is most correct?
| | One drawback of forming a corporation is that it subjects the firm to additional regulations.| | | One drawback of forming a corporation is that it subjects the firm to limited liability.| | | One drawback of forming a corporation is that it makes it more difficult for the firm to raise capital.| | | All of the answers above are correct.|

| | Answers b and c are correct.|
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| Correct. |

Question 5| | 10 / 10 points|
Which of the following statements is most correct?
| | The optimal dividend policy is the one that satisfies the shareholders because they supply the firm's capital| | | The use of debt financing has no effect on cash flow or stock price.| | | The riskiness of projected cash flows depends upon how the firm is financed.| | | Stock price is dependent on the projected cash flows and the use of debt, but not on the timing of the cash flow stream.| | | Dividend policy is one aspect of the firm's financial policy that is determined directly by the shareholders.| View Feedback|

| see page 11-12Correct. |

Question 6| | 10 / 10 points|
Which of the following statements is most correct?
| | In a partnership, liability for other partners' misdeeds includes but is limited to the amount a particular partner has invested in the business.| | | Partnerships must be formed according to specific rules which include the filing of a formal written agreement with state authorities where the partnership does business.| | | A fast growth company would be more likely to set up a partnership for its business organization than would a slow-growth company.| | | Partnerships have difficulty attracting capital in part because of the other disadvantages of the partnership form of business, including impermanence of the organization.| | | A major disadvantage of a partnership as a form of business organization is the high cost and practical difficulty of its formation.| View Feedback|

| Correct |

Question 7| | 0 / 10 points|
The key value of...
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