Saint Leo MBA 570 quiz 1

Question 1.1.Which of the following organization forms accounts for the greatest number of firms? (Points : 10)

“S” corporation
Limited partnership
Sole proprietorship
“C” corporation

Question 2.2.Which of the following statements is most correct? (Points : 10)

An advantage to incorporation is that it allows for less regulation of the business.
An advantage of a corporation is that it is subject to double taxation.
Unlike a partnership, a disadvantage of a corporation is that has limited liability.
Corporations face more regulations when compared to partnerships.

Question 3.3.The person charged with running the corporation by instituting the rules and policies set by the board of directors is called the: (Points : 10)

chief operating officer.
company president.
chief executive officer.
chief financial officer.

Question 4.4.If you buy shares of Coca-Cola on the primary market: (Points : 10)

Coca-Cola receives the money because the company has issued new shares.
you buy the shares from another investor who decided to sell the shares.
you buy the shares from the New York Stock Exchange.
you buy the shares from the Federal Reserve.

Question 5.5.The third party who checks annual financial statements to ensure that they are prepared according to GAAP and verifies that the information reported is reliable is the: (Points : 10)

NYSE Enforcement Board.
Accounting Standards Board.
Securities and Exchange Commission (SEC).
auditor.

Question 6.6.On the balance sheet, current maturities of long-term debt appears: (Points : 10)

in the Stockholders’ Equity section.
in the Operating Expenses section.
in the Current Assets section.
in the Current Liabilities section.

Question 7.7.In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, and a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million. Perrigo’s market capitalization is closest to __________. (Points : 10)

$952.16 million
$3,580.14 million
$4,168.06 million
$4,425.15 million

Question 8.8.Which of the following is not an operating expense? (Points : 10)

Interest expense
Depreciation and amortization
Selling, general, and administrative expenses
Research and development

Question 9.9.Off-balance sheet transactions are required to be disclosed: (Points : 10)

in the management discussion and analysis.
in the auditor’s report.
in the Securities and Exchange Commission’s commentary.
in the statement of stockholders’ equity.

Question 10.10.ECE has $200 million in assets, $100 million in shareholder equity, and sales of $300. If ECE’s return on assets (ROA) is 12%, then ECE’s return on equity (ROE) is __________. (Points : 10)

10%
12%
18%
24%

Saint Leo MBA 570 quiz 1

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