1. Austin Power Corp., a corporation incorporated in Delaware, has recently gone bankrupt thus failing to pay its suppliers and creditors. The shareholders of Austin Power should be responsible for these unpaid bills.

Answer: True/False

2. According to Fishers separation principle, a firms investment decision should take into account its different owners consumption preferences because they have no ability to borrow or lend money even if the capital market works perfectly.

Answer: True/False

3. Microsoft Corp. issued a 10-year bond in 2018. Because the company already had other bonds outstanding issued in the past, its new bond offering in 2018 is considered a secondary market transaction.

Answer: True/False

4. Because a corporation is not a human being, it cannot enter into contracts or borrow on its name.