1. Question :
(TCO A) The distinguishing feature of a corporation is that:
Student Answer:
there is no legal difference between the corporation and its
owners.
it is a legally defined, artificial being, separate from its owners.
it spreads liability for its corporate obligations to all
shareholders.
provides limited liability only to small shareholders.
Instructor Explanation: Chapter: 1.1 The Four Types of Firms
Points Received: 10 of 10
Comments:
Question 2.Question :
(TCO A) A _____ is when a rich individual or organization purchases
a large fraction of the stock of a poorly performing firm, and in doing
so, gets enough votes to replace the board of directors and the
CEO.
Student Answer:
shareholder proposal
leveraged buyout
shareholder action
hostile takeover
Instructor Explanation:Chapter: 1.2 Ownership Versus Control of Corporations
Points Received: 10 of 10
Comments:
Question 3.Question :
(TCO A) If Company A and Company B are in the same industry and
use the same production method, and Company A’s asset turnover
is higher than that of Company B, then all else equal, we can
conclude that
Student Answer:
Company A is more efficient than Company B.
Company A has a lower dollar amount of assets than Company
B.
Company A has higher sales than Company B.
Company A has a lower ROE than Company B.
Instructor Explanation: Chapter 2
Points Received: 10 of 10
Comments:

Question 4.Question :
(TCO B) By evaluating cost and benefits using competitive market
prices, we can determine whether a decision will make the firm and
its investors wealthier. This central concept is called:
Student Answer:
the Law of One Price.
the Present Value.
the Valuation Principle.
the Internal Rate of Return.
Instructor Explanation: Chapter: 3.1 Valuing Decisions
Points Received: 10 of 10
Comments:
Question 5.Question :
(TCO D) Which of the following statements is FALSE?
Student Answer:
The principal or face value of a bond is the notional amount we
use to compute the interest payments.
Payments are made on bonds until a final repayment date,
called the term date of the bond.
The coupon rate of a bond is set by the issuer and stated on the
bond certificate.
The promised interest payments of a bond are called coupons.
Instructor Explanation: Chapter: 6.1 Bond Cash Flows, Prices, and Yields
Points Received: 10 of 10
Comments:
Question 6.Question :
(TCO D) Which of the following statements is FALSE