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Solution Manual for Fundamentals of Financial Management 16th Edition by Brigham and Houston, ISBN: 9780357517574, All 21 Chapters Covered, Verified Latest Edition $14.99   Add to cart
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Solution Manual for Fundamentals of Financial Management 16th Edition by Brigham and Houston, ISBN: 9780357517574, All 21 Chapters Covered, Verified Latest Edition
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Solution Manual for Fundamentals of Financial Management 16th Edition by Brigham and Houston, ISBN: 9780357517574, All 21 Chapters Covered, Verified Latest Edition

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  • November 18, 2024
  • 1195
  • 2024/2025
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https://browsegrades.net/singlePaper/416823/testbanksolution-manual-fundamentals-of-financi

,https://browsegrades.net/singlePaper/416823/testbanksolution-manual-fundamentals-of-financi
Name: Class: Date: y




1. An Overview of Financial Management.
y y y y y




True / False
y y




Note that there is an overlap between the T/F and multiple-choice questions, as some of the T/F statements are used in
y y y y y y y y y y y y y y y y y y y y


multiple-choice questions.
y y




Multiple Choice: True/False y y




1. In most corporations, the CFO ranks under the CEO.
y y y y y y y y


a. True
b. False
ANSWER: True y




2. The Chairman of the Board must also be the CEO.
y y y y y y y y y


a. True
b. False
ANSWER: False y




3. The board of directors is the highest ranking body in a corporation, and the chairman of the board is the highest
y y y y y y y y y y y y y y y y y y y y


rankingindividual. The CEO generally works under the board and its chairman, and the board generally has the authority
y y y y y y y y y y y y y y y y y y y


to remove the CEO under certain conditions. The CEO, however, cannot remove the board, but he or she can endeavor
y y y y y y y y y y y y y y y y y y y y


to have the board voted out and a new board voted in should a conflict arise. It is possible for a person to
y y y y y y y y y y y y y y y y y y y y y y y


simultaneously serve as CEO and chairman of the board, though many corporate control experts believe it is bad to vest
y y y y y y y y y y y y y y y y y y y y


both offices in the same person.
y y y y y y


a. True
b. False
ANSWER: True y




4. Partnerships and proprietorships generally have a tax advantage over corporations.
y y y y y y y y y


a. True
b. False
ANSWER: True y




5. A disadvantage of the corporate form of organization is that corporate stockholders are more exposed to
y y y y y y y y y y y y y y y


personalliabilities in the event of bankruptcy than are investors in a typical partnership.
y y y y y y y y y y y y y y


a. True
b. False
ANSWER: False y




6. An advantage of the corporate form of organization is that corporations are generally less highly regulated
y y y y y y y y y y y y y y y


thanproprietorships and partnerships.
y y y y


a. True
b. False
ANSWER: False y




7. Some partners in a partnership may have different rights, privileges, and responsibilities than other partners.
y y y y y y y y y y y y y y


a. True y



Copyright yCengage yLearning. yPowered yby Page y1
yCognero.

,https://browsegrades.net/singlePaper/416823/testbanksolution-manual-fundamentals-of-financi
Name: Class: Date: y




1. An Overview of Financial Management.
y y y y y




b. False y


ANSWER: True y




8. One advantage of the corporate form of organization is that it avoids double taxation.
y y y y y y y y y y y y y


a. True
b. False
ANSWER: False y




9. It is generally harder to transfer one's ownership interest in a partnership than in a corporation.
y y y y y y y y y y y y y y y


a. True
b. False
ANSWER: True y




10. One danger of starting a proprietorship is that you may be exposed to personal liability if the business goes
y y y y y y y y y y y y y y y y y y


bankrupt.This problem would be avoided if you formed a corporation to operate the business.
y y y y y y y y y y y y y y y


a. True
b. False
ANSWER: True y




11. If a corporation elects to be taxed as an S corporation, then it can avoid the corporate tax. However, its
y y y y y y y y y y y y y y y y y y y


stockholderswill have to pay personal taxes on the firm's net income.
y y y y y y y y y y y y


a. True
b. False
ANSWER: True y




12. If a corporation elects to be taxed as an S corporation, then both it and its stockholders can avoid all Federal
y y y y y y y y y y y y y y y y y y y y


taxes.This provision was put into the Federal Tax Code in order to encourage the formation of small businesses.
y y y y y y y y y y y y y y y y y y y


a. True
b. False
ANSWER: False y




13. It is generally less expensive to form a corporation than a proprietorship because, with a proprietorship,
y y y y y y y y y y y y y y y


extensivelegal documents are required.
y y y y y


a. True
b. False
ANSWER: False y




14. The more capital a firm is likely to require, the greater the probability that it will be organized as a corporation.
y y y y y y y y y y y y y y y y y y y y


a. True
b. False
ANSWER: True y




15. One disadvantage of forming a corporation rather than a partnership is that this makes it more difficult for the
y y y y y y y y y y y y y y y y y y


firm'sinvestors to transfer their ownership interests.
y y y y y y y




a. True y



Copyright yCengage yLearning. yPowered yby Page y2
yCognero.

, https://browsegrades.net/singlePaper/416823/testbanksolution-manual-fundamentals-of-financi
Name: Class: Date: y




1. An Overview of Financial Management.
y y y y y




b. False y


ANSWER: False y




16. Organizing as a corporation makes it easier for the firm to raise capital. This is because corporations' stockholders
y y y y y y y y y y y y y y y y y


arenot subject to personal liabilities if the firm goes bankrupt and also because it is easier to transfer shares of stock
y y y y y y y y y y y y y y y y y y y y y y


than partnership interests.
y y y


a. True
b. False
ANSWER: True y




17. In order to maximize its shareholders' value, a firm's management must attempt to maximize the stock price in
y y y y y y y y y y y y y y y y y


thelong run, or the stock's "intrinsic value."
y y y y y y y y


a. True
b. False
ANSWER: True y




18. If management operates in a manner designed to maximize the firm's expected profits for the current year, this
y y y y y y y y y y y y y y y y y


willalso maximize the stockholders' wealth as of the current year.
y y y y y y y y y y y


a. True
b. False
ANSWER: False y




19. In order to maximize its shareholders' value, a firm's management must attempt to maximize the expected EPS.
y y y y y y y y y y y y y y y y


a. True
b. False
ANSWER: False y




20. In order to maximize its shareholders' value, a firm's management must attempt to maximize the stock price on
y y y y y y y y y y y y y y y y y


aspecific target date.
y y y y


a. True
b. False
ANSWER: False y




21. As a result of financial scandals occurring during the past decade, there has been a strong push to improve
y y y y y y y y y y y y y y y y y y


businessethics.
y y


a. True
b. False
ANSWER: True y




22. There are many types of unethical business behavior. One example is where executives provide information that
y y y y y y y y y y y y y y y


theyknow is incorrect to banks and to stockholders. It is illegal to provide such information to banks, but it is not
y y y y y y y y y y y y y y y y y y y y y y


illegal to provide it to stockholders because they are the owners of the firm, not outsiders.
y y y y y y y y y y y y y y y y


a. True
b. False
ANSWER: False y




Copyright yCengage yLearning. yPowered yby Page y3
yCognero.

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