Capture

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1. Question : Student Answer:

One of the tasks for financial managers when identifying projects that increase firm value is to identify those projects where benefits are at least equal to the project’s costs. taking the project will increase the book value of the firm’s common stock. taking the project will decrease the book value of the firm’s debt outstanding. none of the above

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2. Question : Student Answer:

Which of the following is not one of the five basic corporate finance functions? external financing function capital budgeting function risk management auditing

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3. Question :

Since the Tax Relief Act of 2003, if a corporation has pre-tax earnings of $110,000 while the corporation is subject to a 35% income tax rate and an investor is subject to a 35% personal tax rate and a 15% capital gains tax rate, then what is the after-tax income that the investor could capture if all of the firm’s earnings are paid out in dividends? $93,500 $71,500

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$60,775 $46,475 Comments:

4. Question :

Since the Tax Relief Act of 2003, if a corporation or partnership has pre-tax earnings of $110,000 while the corporation is subject to a 35% income tax rate and an investor is subject to a 35% personal tax rate and a 15% capital gains tax rate, then what is the advantage to being a partnership (compared to a corporation) if all of the proceeds are paid out to investors in either legal form? ($22,500) $0 $10,725 $24,725

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5. Question : Student Answer:

The Sarbanes-Oxley Act of 2002 established the Securities and Exchange Commission. requires CEO and CFOs of all large companies to personally certify their firms’ financial statements. defined ethical behavior. established that a CFO must be a member of the firm’s audit committee of the board of directors.

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6. Question : Student Answer:

Which of the following is a strength of the...