Which of the following forms of business organization are not considered to be entities in their own right? a. Corporations b. Purtnerships c. S Corporations d. C Corporations Suppose that a friend approached you for advice on what form of business to start, and she indicated that she was more concerned about personal liability than double taxation. Which form of business organization would you recommend to her, and why? a. A corporation, because it would have double taxation and unlimited personal liability. b. A sole proprietorship, because it would have double taxation and unlimited personal liability. c. A corporation, because it would have double taxation but no personal liability. d. A sole proprietorship, because it would have double taxation but no personal liability. Assume that 100 of your closest friends want to start a new business. The business is expected to be quite profitable, but it does have a good deal of risk involved. If all of the 100 friends would like to minimize their personal liability, which of the following forms of business organization nould you recommend to them? a. A partnership 1. A corporation c. An S corporation 1. A sole proprietorship The primary goal of the financial manager should be to: - Maximize profits. 0. Minimize costs. + Maximize stock price. 4. Maximizc market share. 5. In the agency relationship between the shareliolders and the managers of in vorporation: a. Managers and shareholders are both principals. b. Managers and shareholders are both agents. c. Managers are the principals, and shareholders are the agents. d. Managers are the agents, and shareholders are the princi pals. 6. Stock options help to mitigate agency problems between shareholders ar managers by: a. Aligning the interest of managers with those of shareholders. b. Offering managers a stable, constant reward for a job well done. c. Allowing shareholders to fire underperforming managers. d. Diluting the ownership structure of the company. 7. Which of the following is not an appropriate primary goal for a corporation financial manager? a. Maximize shareholder wealth b. Maximize stock price c. Maximize the number of shares of stock d. Maximize the value of an all-equity firm 8. Shareholders act as: a. Principals in their agency relationship with managers, but as agents in their agency relationship with lenders. b. Agents in both their agency relationship with managers and in their agency relationship with lenders. c. Agents in their agency relationship with managers, but as principals in their agency relationship with lenders. d. Principals in both their agency relationship with managers and in their agency relationship with lenders. 9. The term double taxation, when used to refer to selected forms of busines organizatiohs, refers to: a. Corporations collecting sales tax from customers and paying taxes on corporate earnings. b. Corporations paying taxes on corporate earnings and investors paying toxes on the earitings paid out to them