1. The three most common forms to organize a business are ________.

1 point

Management, proprietorships, and benefactors

Sole proprietorships, corporations, and partnerships

Sole proprietorships, ownerships, and benefactors

Corporations, partnerships, and benefactors

2.

Question 2

Which of the following is NOT an advantage to sole proprietorships?

1 point

Easy to form

Few government regulations

No corporate income taxes

Unlimited liability

3.

Question 3

In a sole proprietorship all profits are yours, you just need to file personal income taxes.

1 point

Ture

False

4.

Question 4

Which of the following are shared advantages of both a partnership and a sole proprietorship?

1 point

Easily formed

Few government regulations

Unlimited Liability for the owner

No corporate income taxes

5.

Question 5

Advantages of a partnership include:

1 point

Few government regulations

Easy to obtain large amount of capital

Easy transferability of ownership

No corporate income taxes

6.

Question 6

The process of converting a private company to a public company is called a/an:

1 point

Initial Proprietary Ownership

Initial Public Offering

Intended Price Offering

Initial Price Ownership

7.

Question 7

Which of the following are downsides to having a corporation?

1 point

Double taxation

Forming a corporation costs more

Unlimited liability

More Record keeping, operational processes and reporting

8.

Question 8

Which of the following is true for owners of an LLC?

1 point

Owners are protected from personal liability such as business debt and claims.

Operating agreements specify owner rights and responsibilities.

LLCs are not member-managed or manager-managed.

Owners of an LLC are called members and can include partnership and corporation entities.

9.

Question 9

An operating agreement for an LLC with multiple owners isn't optional and important to have in place when multiple owners are involved.

1 point

True

False

10.

Question 10

If the company does not have stocks traded in the public market, the goal should be to maximize shareholder wealth.

1 point

True

False

11.

Question 11

From the examples in the lecture, what was the company that had a buy-one-give-one donation model?

1 point

Target

TOMS

Red Cross

Goodwill

12.

Question 12

To be considered majority shareholders, 80% or more of a company's outstanding stock must be owned.

1 point

True

False

13.

Question 13

Shareholders' rights can be broken into _ part(s):

1 point

2, Voting rights and rights to dividends

1, voting rights only

0, no rights, majority shareholder holds all the power

2, cash flow rights to dividend rights

14.

Question 14

An inside director is a board member who is a/an

1 point

Representative of employees

CEO

Major stakeholder

All of the above

15.

Question 15

Good corporate governance requires a balance between insider directors and outside directors.

1 point

True

False

16.

Question 16

The ______________ Committee is responsible for nominating new members to the board.

1 point

Compensation Committee

Nominating Committee

Audit Committee

Executive Committee

17.

Question 17

The ______________ Committee determines the pay package of top executives.

1 point

Audit Committee

Executive Committee

Nominating Committee

Compensation Committee

18.

Question 18

Match the following:

i. Controller

ii. CFO

iii. Treasurer

iv.CEO

1. Explains earnings results and forecasts to shareholders as well as media.

2. Manages internal accounting systems, prepares financial statements, and tax returns.

3. Manages cash, liquidity, risk, and setting up budgets.

4. Manage corporations and make decisions.

1 point

(i. + 2), (ii. + 4), (iii. + 3), (iv + 1)

(i. + 3), (ii. + 1), (iii. + 4), (iv + 2)

(i. + 2), (ii. + 1), (iii. + 3), (iv + 4)

(i. + 1), (ii. + 3), (iii. + 2), (iv + 4)

19.

Question 19

According to the lecture, approximately what percentage of CEO compensation comes from stock options?

1 point

30%

49%

60%

28%

20.

Question 20

If a CEO is awarded 40,000 stock options to purchase shares at $40 per share when it is trading at $40, how much money will the CEO make per share in 5 years if it trades at $80 per share?

1 point

$80

$40

Break-even

$50