In the left margin, clearly write T for statements you believe to be true and F for those you feel are False. Or, since you’re submitting electronically, if you prefer you may simply create your own page and write T or F next to each number
1. Corporate profits tax is applied to a corporation’s profits after dividends have been subtracted.
2.. The wider the risk premium, the lower the price of a promised or expected future cash flow.
3. Shareholders of a corporation are owners of the corporation.
4. For a given amount of owners’ equity, to achieve higher earnings a greater ROE is required.
5. The “Agency Problem” refers to the Board of Directors not properly representing the interests of the company’s shareholders.
6. The faster an asset can be depreciated (according to IRS rules), the greater a company’s net change in cash.
7. The market value of a company equals the number of shares multiplied by the most recent transaction price per share.
8. The General Partner in a partnership is taxed once; the Limited Partners are taxed twice.
9. The concept of “limited liability” of a corporation means that if, during any year, the company’s costs exceed its revenue, the company is not liable for the difference even if its assets are greater than its liabilities.
10. Reserve requirements refer to the percentage of a bank’s deposits it must hold as reserves (or vault cash). Get Finance homework help