31.

Which of the following statements about a corporation is not correct?

A.	A corporation is a separate legal entity.

B.	A corporation has easy transferability of ownership.

C.	A corporation may have the ability to raise large amounts of capital.

D.	A corporation's owners have unlimited liability.

32.

Holders of common stock receive certain benefits, such as a residual claim, which is the:

A.	right of stockholders to be paid back for their investment before anyone else if the company ceases operation.

B.	right to oversee management of the company.

C.	right to share in any remaining assets after creditors have been paid off, should the company cease operations.

D.	continuing right to receive a share of the company's profits in the form of dividends.

33.

Corporations can raise large amounts of money because:

A.	shares of stock can be purchased in small amounts, so even small investors can participate.

B.	investors always prefer to invest in stock so they can receive dividends.

C.	stocks are always a good investment.

D.	investing in the stock market is the surest way to get rich quick.

34.

Advantages of debt financing over equity financing are that:

A.	repayment of debt principal is optional.

B.	interest payments on debt are not tax deductible.

C.	control is not diluted.

D.	more money is available.

35.

Advantages of equity financing over debt financing include that:

A.	dividends are mandatory.

B.	equity financing does not require repayment.

C.	dividends are tax deductible.

D.	stockholders' control will increase.