Which of the following statements is CORRECT?

Question 1 options:

	It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship
	Corporate shareholders are exposed to unlimited liability.
	Corporations generally face more regulations than sole proprietorships.
	A and C

Question 2 (2 points)

Your company is seeking to borrow money today to finance a business vehicle. The business can make the following repayments at an interest cost of 7% per annum: year 1 = $8,000; year 2 = $9,500; year 3 = $12,000. How much money can you borrow today based on these future repayments?

Question 2 options:

Question 3 (2 points)

You wish to establish a $20,000 annual scholarship at your old university. The university will manage the funds and expects to earn 9% per year on its investments.

1. What amount will you have to donate today to ensure $20,000 is available each year indefinitely?

2. How much will you have to donate today if you want the scholarship amount to increase by 4% each year in perpetuity?

Question 3 options:

Question 4 (1 point)

A rights issue is a:

Question 4 options:

	an initial listing of a corporation on the stock exchange.
	Issue of shares to selected financial institutions
	a pro-rata (proportional) issue of additional shares to existing shareholders
	an opportunity for shareholders to reinvest their dividend into additional company shares

Question 5 (1 point)

A future or present value of a cash flow depends upon:

Question 5 options:

	the number of periods
	the number of compounding periods per year.
	all the listed options
	the interest rate