fundamentals of corporate finance 11th canadian edition By Stephen A. Ross Test bank
C) The corporation has limited liability for business debts.
D) When dividends are paid, corporate profits are taxed once.
E) It is difficult to transfer ownership of corporate shares.
177) Double taxation refers to which of the following scenarios?
A) Both bondholders and shareholders must pay taxes.
B) The corporation pays taxes on earnings, and creditors pay taxes on interest received.
C) The corporation pays taxes on its earnings, and shareholders pay taxes on dividends.
D) The corporation pays taxes on revenues and expenses.
E) The corporation pays taxes on revenues and earnings.
178) Which one of the following statements concerning stock exchanges is correct?
A) The NASDAQ has more listed stocks than NYSE.
B) The TSX is primarily a dealer market.
C) The exchange with the strictest listing requirements is NASDAQ.
D) Some large companies are listed on NASDAQ.
E) Most debt securities are traded on the TSX.
179) Trace the passage of cash from the financial markets to the firm and from the firm back to the financial markets.
A) 1. Cash flows to the firm from the financial market. 2. The firm invests the cash in current and fixed assets. 3. These assets generate cash. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders.
B) 1. The firm invests the cash in current and fixed assets. 2. Cash flows to the firm from the financial market. 3. These assets generate cash. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders.
C) 1. The firm invests the cash in current and fixed assets. 2. These assets generate cash. 3. Cash flows to the firm from the financial market. 4. Corporate taxes are paid. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders.
D) 1. The firm invests the cash in current and fixed assets. 2. These assets generate cash. 3. The rest goes back to the financial markets as cash paid to creditors and shareholders. 4. Cash flows to the firm from the financial market. 5. Corporate taxes are paid. 6. Cash flow is reinvested in the firm.
E) 1. The firm invests the cash in current and fixed assets. 2. Corporate taxes are paid. 3. These assets generate cash. 4. Cash flows to the firm from the financial market. 5. Cash flow is reinvested in the firm. 6. The rest goes back to the financial markets as cash paid to creditors and shareholders.
180) Which of the following is NOT a general criterion that must be met for a firm to be listed on the TSX?
A) The firm must have a minimum number of shareholders owning at least 300 shares.
B) The firm must have a minimum number of shares outstanding.
C) The firm must have a market value of at least $4 million.
D) The firm must have a minimum number of directors.
E) The firm must have a minimum amount of assets.