Exam1-Spring2011 (1)

Exam1-Spring2011 (1) - (Moore RNumber PrintedName...

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First Examination – Finance 3320 - Spring 2011 (Moore) R-Number: ____________________ Printed Name: ____________________ Section and Time: ____________________ Ethical conduct is an important component of any profession.  The Texas Tech University Code of  Student   Conduct   is   in   force   during   this   exam.     Students   providing   or   accepting   unauthorized  assistance will be assigned a score of zero (0) for this piece of assessment.   Using unauthorized  materials   during   the   exam   will   result  in  the  same  penalty.     Ours’   should  be  a  self-monitoring  profession.  It is the obligation of all students to report violations of the honor code in this course.  By  signing below, you are acknowledging that you have read the above statement and agree to abide by  the stipulated terms. Student’s Signature: ______________________________ Clearly Fill in the appropriate bubble on the Scantron form for each of the following questions.  Choose the  BEST  response.  There is only one answer per question. 1. Which of the following statements is CORRECT? a. One of the advantages of the corporate form of organization is that it avoids double taxation. b. It is easier to transfer one’s ownership interest 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 every stockholder has equal voting rights, i.e., “one person, one vote.” e. Corporations of all types are subject to the corporate income tax. 2. Relaxant Inc. operates as a partnership. Now the partners have decided to convert the business into a corporation. Which of the following statements is CORRECT? a. Relaxant’s shareholders (the ex-partners) will now be exposed to less liability. b. The company will probably be subject to fewer regulations and required disclosures. c. Assuming the firm is profitable, none of its income will be subject to federal income taxes. d. The firm's investors will be exposed to less liability, but they will find it more difficult to transfer their ownership. e. The firm will find it more difficult to raise additional capital to support its growth. 3. Which of the following statements is CORRECT? a. One drawback of forming a corporation is that it generally subjects the firm to additional regulations. b. One drawback of forming a corporation is that it subjects the firm’s investors to increased personal liabilities. c. One drawback of forming a corporation is that it makes it more difficult for the firm to raise capital. d.
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This document was uploaded on 10/27/2011 for the course BUSINESS ALL at Texas Tech.

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Exam1-Spring2011 (1) - (Moore RNumber PrintedName...

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