Felton Financial Inc, had net earnings last year of $487,000. If the firm has a dividend payout policy of 30%, what was the addition to retained earnings? A) $340,900 B) $487,000 C) $146,100 D) There is not enough information to answer this question. ANSWER A Explanation: A) NE * (1-DPO) = $487,000 * […]
Date: September 19th, 2020
Some directors and officers (D&O) liability policies include an insuring agreement tcovers the legal liability of a corporation arising out of the wrongful acts of directors and officers. This coverage for the corporation is called A) blanket coverage. B) corporate reimbursement coverage. C) personal liability of directors and officers coverage. D) entity coverage. […]
Date: September 19th, 2020
Which of the following forms of business organization limits the liability of owners? A) sole proprietorship B) general partnership C) two person partnership D) corporation ANSWER D
Date: September 19th, 2020
One general liability loss exposure develops as a result of a written or oral agreement to assume the legal liability of another party. A lease that specifies that the building owner is held harmless for liability arising out of use of the building is an example. This liability loss exposure is A) premises and operations […]
Date: September 19th, 2020
Which of the following organization forms accounts for the most revenue? A) “S” corporation B) Limited partnership C) “C” corporation D) Limited liability company ANSWER C
Date: September 19th, 2020
Explain why the author uses the following formula to explain the amount of money a firm needs to repay an outstanding principal balance. Support your answer with n example that shows how much in EBT a firm in a 30% tax bracket would require to repay $1,000 in principal. Before-tax cost of debt repayment = […]
Date: September 19th, 2020
The auto dealers coverage form includes coverage for violating odometer (mileage) disclosure laws and selling a vehicle where there was a title defect. Which coverage under the auto dealers coverage form would respond to such claims? A) garagekeepers liability coverage B) liability coverage for “covered autos” C) general liability insurance coverage D) acts, errors or […]
Date: September 19th, 2020
What was the average annual rate of return on 3-month U.S. Treasury bills during the period 1990 to 2014? A) 3.04% B) 5.68% C) 4.23% D) 2.15% ANSWER A
Date: September 19th, 2020
Advantages of the corporate form of business organization include A) minimal legal requirements. B) double taxation. C) easier transfer of ownership. D) none of the above ANSWER C
Date: September 19th, 2020
You are considering investing in Ford Motor Company. Which of the following are examples of diversifiable risk? I. Risk resulting from possibility of a stock market crash. II. Risk resulting from uncertainty regarding a possible strike against Ford. III. Risk resulting from an expensive recall of a Ford product. IV. Risk resulting from interest rates […]
Date: September 19th, 2020
