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Bonds are a safer form of investment because

  Bonds are a safer form of investment because

a. full bond payments are made before stockholders receive any dividends

b. they are guaranteed by the government

c. they are guaranteed by the investment industry

d. a stockholder’s personal assets can be used to pay the bondholder’s interest

e. bondholders can elect the board of directors

57.              Payments to stockholders are called ______, and payments to bondholders are called

a. interest, dividends

b. profits, dividends

c. dividends, profits

d. dividends, interest

e. dividends, mortgages


58.              One disadvantage of the corporate form of business is

a. the ability to raise money is limited by the ability to issue stock

b. the corporation is a separate legal being

c. double taxation

d. the corporation hires professional managers

e. the corporation must pay dividends to shareholders

59              What is meant by the term double taxation?

a. The tax on corporations is double the rate paid by other forms of business.

b. The tax on corporations is one-half the rate paid by other forms of business.

c. Corporations must pay both federal and state taxes.

d. Corporate profits are taxed, and that portion of profits distributed as dividends is
taxed as personal income.

e. The corporation pays taxes on stocks and bonds.

60.              According to the text, the real source of power in the modern corporation lies with the

a. stockholders

b. bondholders

c. board of directors

d. bankers

e. managers

61.              A takeover implies that

a. the common shareholders buy out the bondholders

b. the government takes over the corporation

c. someone or a group is able to purchase all of the outstanding common stock in
a corporation

d. the board of directors takes control of the corporation

e. a proprietorship sells out to a partnership

62.              Most businesses in the United States are organized as

a. sole proprietorships

b. partnerships

c. corporations

d. mutual trust companies

e. mutual fund companies

Dec 11 2019 View more View Less

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