Which of the following statements is CORRECT? a. EVA stands for "economic value added" and is defined as follows: EVA = NOPAT (Total invested capital)(AT cost of capital %) b. MVA stands for "market value added" and is defined as follows: MVA = (Shares outstanding)(Stock price) + Book value of common equity. c. MVA gives us an idea about how much value a firm's management has added during the last year. d. The primary difference between EVA and accounting net income is that when net income is calculated, a deduction is made to account for the cost of common equity, whereas EVA represents net income before deducting the cost of the equity capital the firm uses. e. EVA gives us an idea about how much value a firm's management has added over the firm's life

Which of the following statements is CORRECT?

a. One advantage to forming a corporation is that the owners of the firm have limited liability.

b. Because of their simplified organization, it is easier for proprietors and partnerships to raise large amounts of outside capital than it is for corporations.

c. Bond covenants are an effective way to resolve conflicts between shareholders and managers.

d. Corporations face few regulations and more favorable tax treatment than do proprietorships and partnerships.

e. Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value compared to managers who do not face the threat of hostile takeovers.

Which of the following statements is CORRECT?

a. One of the disadvantages of a proprietorship is that the proprietor is exposed to unlimited liability.

b. It is easier to transfer one's ownership interest in a partnership than in a corporation.

c. One of the advantages of the corporate form of organization is that it avoids double taxation.

d. Corporations of all types are subject to the corporate income tax.

e. One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person, one vote."

Which of the following statements is CORRECT?

a. Corporations have unlimited liability.

b. Reducing the threat of corporate takeover increases the likelihood that managers will act in shareholders' interests.

c. Bond covenants are designed to protect bondholders and to reduce potential conflicts between stockholders and bondholders.

d. Because of their size, large corporations face fewer regulations than smaller corporations and proprietorships.

e. Corporations are taxed more favorably than proprietorships.