Quiz Ch 01 – T/F Agency Problems in Sole Proprietorships vs. Corporations
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Sole proprietorships encounter similar agency issues as corporations.
True or false: Sole proprietorships encounter similar agency issues as corporations.
True or false: In general, the firm’s senior officers appoint the boards of directors.
True or false: The segregation of ownership and management stands out as a defining trait of corporations.
True or false: Under the Dodd-Frank financial reform law of 2010, shareholders were granted the authority to cast a binding vote on executive compensation.
True or false: The decision by Facebook to spend $700 million to acquire Instagram constitutes an investment decision.
True or false: In a limited partnership, general partners have restricted personal liability for business debts.
True or false: A significant drawback of partnerships is the potential for double taxation of profits.
True or false: Sole proprietors’ liability is confined to their investment in the company.
True or false: Financial assets derive their value from being claims on the cash generated by the firm’s real assets.
What is the primary aim of a properly functioning financial market?