1. Which of the following statements is most correct?

1. Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of businesses (in terms of number of businesses) are organized as corporations.
2. Most businesses (by number and total dollar sales) are organized as proprietorships or partnerships because it is easier to set up and operate in one of these forms rather than as a corporation. However, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have important tax advantages over proprietorships and partnerships.
3. Due to legal considerations related to ownership transfers and limited liability, most business (measured by dollar sales) is conducted by corporations.
4. Statements a, b, and c are correct.
5. All of the statements are false.

2. Everest Enterprises experienced a decline in EBITDA (earnings before interest, tax and depreciation and amortization). Which of the following can possibly help explain this decline?

1. Amortization expense increased.
2. Costs of goods sold increased.
3. Depreciation increased.
4. Taxes increased.

1. A 10-year corporate bond has an annual coupon payment of 9 percent. The bond is currently selling at par (100). Which of the following statements is most correct?

1. The bond's yield to maturity is 9 percent.
2. The bond's current yield is 9 percent.
3. If the bond's yield to maturity remains constant, the bond's price will remain at par.
4. Both answers a and c are correct.
5. All of the answers above are correct.