Consider the legal form of the following different business entities: 1. Private limited liability corporation 2. Public/listed limited liability corporation 3. Unincorporated partnership 4. Foundation 5. B-corporation or Benefit-corporation Which ones of these must act in its own best interest and (the best interest of its shareholders) and which ones can legitimately seek to limit profits and prioritise other goals such as charitable donations and the pursuit of social welfare projects? Multiple Choice All of them must act in its own best interest and (the best interest of its shareholders) None of them must act in its own best interest and (the best interest of its shareholders) 1, 2 and 3 must act in its own best interest and (the best interest of its shareholders) and 4 and 5 can legitimately seek to limit profits and prioritise other goals such as charitable donations and the pursuit of social welfare projects 1 and 2 must act in its own best interest and (the best interest of its shareholders) and 3, 4 and 5 can legitimately seek to limit profits and prioritise other goals such as charitable donations and the pursuit of social welfare projects

Q2: Which of the following corporate securities gives the most control rights to its owners for a normal company not experiencing any distress? Multiple Choice Long-term bond Common stock Short-term bank loan Preferred stock

Q3: The CFO of a large corporation you have just inherited takes pride in her corporate finance skills. She asks your opinion on whether it would better (all else equal) to see the price of your corporation's bonds to... Multiple Choice decrease, indicating that bond investors view your firm as less risky. increase, indicating that bond investors view your firm as less risky. decrease, indicating that bond investors view your firm as more willing to take risks. increase, indicating that bond investors view your firm as more willing to take risks.

Q4: Select the false statement from the choices below regarding the NPV rule and the rate of return rule: Multiple Choice Accept a project if its NPV > 0. Accept a project if its rate of return > opportunity cost of capital. Reject a project if the NPV < 0. Accept a project if its rate of return > 0.