Comm180Test1F05-V1

Comm180Test1F05-V1 - V1 COMM 180 Test 1 Fall 2005 Check the...

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V1 COMM 180 Test 1 Fall 2005 Check the section you are enrolled: Section 1, Tuesday/Thursday 8am Section 2, Tuesday/Thursday 3:30pm Print your name: Name ______________________________________________________ Write out and sign the pledge:
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V1 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1. Corporations receive money from investors with: A. seasoned new issues. B. initial public offerings. C. primary market transactions. D. A and B. E. All of the above. 2. The goal of the firm should be: A. Maximization of profits. B. Maximization of consumer satisfaction. C. Maximization of shareholder wealth. D. Maximization of sales. 3. If one security has a greater risk than another security, how will investors respond? A. They will require a higher rate of return for the investment that has greater risk. B. They will require a lower rate of return for the investment that has greater risk. C. They would be indifferent regarding their expectation of rates of return for either investment. D. None of the above. 4. Diversification increases when __________ decreases. A. variability B. return C. risk D. A and C E. All of the above. 5. Which of the following reasons is most responsible for corporations being the most important form of business organization in the United States? A. Corporations have limited life. B. Stockholders have unlimited liability. C. Corporations are subjected to less taxation than the other forms of business organization. D. Corporations have the ability to raise larger sums of capital than the other forms of business organization. E. Corporations are subject to less government regulation than the other forms of business organization. 2
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V1 6. Which of the following goals is in the best long-term interest of stockholders? A. Risk minimization B. Maximizing sales revenues C. Maximizing of the market value of the existing shareholders’ common stock D. Profit maximization 7. Dorning Shade Company will use an estimated 50,000 gumbands in its manufacturing process next year. The carrying cost of gumband inventory is $.04 per unit, and the cost of reordering gumbands is $50 per order. What is Dorning Shade’s economic ordering quantity for gumbands (round to the nearest 100 gumbands)? A. 8,100 B. 10,700 C. 9,700 D. 11,200 8. Which of the statements below is true? A. It is very complicated (legally) to establish a corporation. B. No legal criterion exists for a general partnership. C. The sole proprietorship and the general partnership both feature unlimited liability. D. All of the above are true. 9.
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Comm180Test1F05-V1 - V1 COMM 180 Test 1 Fall 2005 Check the...

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