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Test Bank For Fundamentals of Corporate Finance 7th Canadian Edition Ross
Test Bank For Fundamentals of Corporate Finance 7th Canadian Edition Ross
Student:
1. When evaluating a project in which a firm might invest, the size but not the timing of the cash flows is
important.
True False
2. In capital budgeting, the financial manager tries to identify investment opportunities that are worth more
to the firm than they cost to acquire.
True False
3. Maximization of the current earnings of the firm is the main goal of the financial manager.
True False
4. The primary goal of a financial manager should be to maximize the value of shares issued to new
investors in the corporation.
True False
5. The primary goal of financial management is to minimize the corporate tax liability.
True False
6. When owners are managers (such as in a sole proprietorship), a firm will have agency costs.
True False
7. IBEC Inc. of Toronto spends approximately $2 million annually to hire auditors to go over the firm's
financial statements. This is an example of an indirect agency cost.
True False
8. The board of directors has the power to act on behalf of the shareholders to hire and fire the operating
management of the firm. In a legal sense, the directors are "principals" and the shareholders
are "agents".
True False
9. The corporate officer generally responsible for tasks related to tax management, cost accounting,
financial accounting, and data processing is the:
A. Corporate Controller.
B. Vice President of Operations.
C. Director.
D. Corporate Treasurer.
E. Chairman of the Board.
10. The corporate officer generally responsible for tasks related to cash and credit management, financial
planning, and capital expenditures is the:
A. Chairman of the Board.
B. Vice President of Operations.
C. Corporate Controller.
D. Corporate Treasurer.
E. Director.
11. The process of planning and managing a firm's long-term investments is called:
A. Capital structure.
B. Working capital management.
C. Agency cost analysis.
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D. Capital budgeting.
E. Financial depreciation.
12. The mixture of debt and equity used by the firm to finance its operations is called:
A. capital structure.
B. financial depreciation.
C. working capital management.
D. capital budgeting.
E. agency cost analysis.
13. The management of the firm's short-term assets and liabilities is called:
A. Financial depreciation.
B. Capital structure.
C. Capital budgeting.
D. Working capital management.
E. Agency cost analysis.
14. A business owned by a single individual is called a(n):
A. Partnership.
B. Closed receivership.
C. Sole proprietorship.
D. Corporation.
E. Open structure.
15. A business formed by two or more individuals or entities is called a(n):
A. Open structure.
B. Sole proprietorship.
C. Corporation.
D. Partnership.
E. Closed receivership.
16. The division of profits and losses between the members of a partnership is formalized in the:
A. Indenture contract.
B. Indemnity clause.
C. Partnership agreement.
D. Statement of purpose.
E. Group charter.
17. A business created as a distinct legal entity composed of one or more individuals or entities is called
a(n):
A. Sole proprietorship.
B. Partnership.
C. Closed receivership.
D. Corporation.
E. Open structure.
18. The document that legally establishes domicile for a corporation is called the:
A. Bylaws.
B. Partnership agreement.
C. Articles of incorporation.
D. Indenture contract.
E. Amended homestead filing.
19. The rules by which corporations govern themselves are called:
A. Indenture provisions.
B. Partnership agreements.
C. Indemnity provisions.
D. Bylaws.
E. Articles of incorporation.
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was canonized, and, as la reine Bathilde, was greatly venerated in the
believing days of France. Denmark also used this name, having probably
taken it from England. There ‘Dronning Bothild,’ the wife of king Ejegod,
spread the name among the maidens, so that it passed to Norway as Bodild,
Bodil, and even to the contraction Boel.
Of English birth, too, was the Commanding-wolf—Bedvuolf, or Bodvulf
—who, with his brother, St. Adolf, went, about the end of the sixth century,
to seek religious instruction in Gallia-Belgica. Adolf became bishop of
Maestricht, and eponym to the Adolphuses. Bodvulf came home, and
founded the monastery of Ikano, where he died in 655, and was canonized.
The monastery was destroyed by the Danes, and the situation forgotten, but
the saint’s relics were carried away by the fugitive monks, and dispersed
into various quarters, giving title to four churches in London, besides St.
Botolf’s bridge, commonly called Bottlebridge, in Huntingdonshire, and St.
Botolf’s town, in Lincolnshire, usually known as Boston, whence was
called its American cousin Boston, with little relation to the saint. The
tower of the church of St. Botolf, looking forth over the Wash, was a valued
landmark, and thence the saint was apparently viewed as a friend of
travellers, and connected with the entrances to cities, much as St.
Christopher is elsewhere. Camden even supposed him to be Boathulf, or
boat helper, and his day, the 17th June, is a market day in Christiania, under
the term of Botolsok, or Botsok. In Jutland there is a church of St. Botolv;
and in the North the names of Botol and Bottel are kept up; while, in
England, there only remain to us the surnames of Bottle and Biddulph. The
Old German forms of the two names above-mentioned are Botzhild,
Botzulf; and Botzo, or Boso, a Commander, was now and then used as a
name with them, as in the instance of the troublesome duke of Burgundy,
whom French historians generally call Boson, and who is apt to be
translated by böse, wicked.
Boto, Botho, Poto, are also found in Germany, and the very earliest
specimen of this class of name is to be found in Botheric, commanding
king, the name of the governor whose murder in the hippodrome caused
Theodosius to give his bitterly repented command for the massacre of
Thessalonica. Now and then bot occurs at the end of a word, as in the
Spanish prince Sisebuto, the messenger of victory, or victorious
commander.
These are not the same with some that look much like them, derived from
the Northern bød, German badu, A.G.S. beado, war. Beadwig, in the
Wodenic ancestry, is thus battle war, and the Gothic king of Italy, Totila, is
probably made by the Romans from Bødvhar, battle pleader, a name still
used in the North as Bødvar. Bødmod, Bødulf, and Bødhild, or Bødvild,
have also been in use.[146]
S III.—Brightness.
The root brâj furnished the Greek φλέγεεν, Latin flagrare, and Gothic
bairht, the Anglo-Saxon beohrt, or byrht, the Old German percht, and
Northern bjart.
It is a component of Frank, German, and Anglo-Saxon nomenclature, but
is rarely found in genuine Norsk; the only instance in the Landnama-bok is
Biartmar, who is noted as of Irish birth, so may have brought an Anglo-
Saxon name.
Bertha, the most obvious of all the progeny of biart, has been treated of
in her character as a personification of the bright Epiphany night, mixed up
with an old epithet of Frigga and with the spinning Holda. So, in Swabia,
these legends have formed a masculine, Berchthold, who has become the
wild huntsman in that quarter. Berchtvold was really an English prince of
the Heptarchy, and Brichtold is in Domesday. Perahtholt is a veritable Old
German name, making the modern Bartold—Niebuhr’s name,—the Italian
Bertaldo, and French Bertould. Bertalda is not so likely to be the feminine
of this word as to come from Berchthilda, like the name of Bertille, a
sainted abbess of Chelles.
It is not easy to discover whether the most popular of all thus
commencing should be regarded as a single corrupted name, or the produce
of two, of which one has the second syllable hramn, a raven, the other rand,
a house. The patron saint of all alike is Bertichramnus, bishop of Mans till
623, and his Latinism leaves no doubt that he was Bright-raven. It was
chiefly popular in France, whence we must have obtained it, although there
is no instance of it in Domesday, and it was especially glorious in the
fourteenth century, for the sake of gallant Constable du Guesclin, ‘the eagle
of Brittany,’ whom Spanish chroniclers, by a droll perversion of his
appellation, called ‘Mosen Beltran Claquin,’ when he came to fight their
battles.
The wolf was sure to accompany the raven; so Perahtolf, or Bertulf, was
canonized as an abbot in Artois, and left the German Bertulf, and our own
Bardolph, the flaming comrade of Falstaff.
Bertwine, or Bright friend, was the St. Bertin of France, and the
Bertuccio of Italy, often found in the old Lombardic towns.
Brihtric was the English earl who so gallantly died in defending England
from the Danes in the unhappy days of Ethelred the Unready, and another
Brihtric was the unsuccessful suitor of Matilda of Flanders, on whom she
wreaked an unworthy vengeance after the Conquest. All the Brihts in
Domesday seem to be of Saxon birth, since they use the English instead of
the Norman French commencement, which was already Ber, as in the
instance of Bertrade de Montfort, Bright speech, the countess of Anjou,
who deserted her husband for Philippe I. of France. The remaining forms
are—
S IV.—War.
The warrior names were of the fiercest order. Leid (if it do not mean a
road) was the same with the word in modern German, meaning hurt or
mischief, and expressed spite or violence. The North had Liedulf, afterw—
ards contracted into Leiul, and no doubt the Scottish Lyulf, and German
Lethard, Lethild, Laidrad, Laidwald, Laidwig.
In the same spirit we have neid or nöt, meaning violence or compulsion,
though it has resulted in the German neid, envy, and our need, want. We
have it in the name of St. Neot, the relative and rebuker of King Alfred in
his haughty days, and the hero of a legend of little fishes daily renewed for
his food. Also Nidhard was a great chronicler of Frank history, and left a
name surviving as Nyddert, in Friesland, and cut into Nitz, in Germany.
There, too, were Notburg and Notger, Nidbert in France, and in the North,
Notulf, afterwards written Notto. The terminal nôt is, however, more
common.
Wig or Vig is war itself, and is found in the genealogy of Odin. Wægdæg,
or War day, is an ancestor of the Deiran kings.
Vigleîk still subsists in the North, and so does Viglaf, relic of war, the
same as that of Wiglaf, the chronicler.
The other forms are—
These are almost all German. The terminations in wig are often owing to
German pronunciation of the word veh, or vieh, consecration, and
sometimes of the northern veig, liquor.
The strange northern name of Snorre, famous for the sake of that
Froissart of the North, Snorre Sturleson, comes from snerra, strife.
Styrke is the strong, the same word as that in which the old chroniclers
describe William the Conqueror, as ‘so very stark.’ Sterkulv and a few other
forms have been found in the North.
Toke is a very curious old name. It seems to mean the mad or raging, and,
growing into Tyke or Tyge in Denmark, was the name that was Latinized
into Tycho by the celebrated astronomer Brahe, who did not leave his
madness behind him with his name. The famous Jomsburg sea-rover, a sort
of northern Lycurgus of the tenth century, was Palnatoke, supposed to be
properly Toke, the son of Palne. Palne is an unexplained name used by the
Danes, and perhaps borrowed from the Wends; but there are a few other
instances of it, among them the Anglicized Earl Pallig, the husband of
Sweyn’s sister Gunhild, who was killed by Ethelred the Unready.
Thiostr means hardness or harshness, and was in use in the North as
Triostulf, since contracted into Kjostol, Thiostvald, Thiostar; and probably
Tostig, the ungracious son of Godwine, who brought Harald Hardrada to
invade England, took his name from thence.
S V.—Protection.
S VI.—Power.
Magan is the Gothic and Saxon to be able, whence our defective may,
and a number of other words in all the various northern tongues, in especial
main or chief. The names from it are chiefly of German origin. Maginfred,
or Powerful-peace, was a fine Old German name, which, by the time it
came to the brave but unfortunate Sicilian, son of Frederick II., had been
worn down to Manfred, whence he was called by his subjects Manfredi, by
his French foes Mainfroi, and by his English contemporaries Mainfroy.
Meginhard, main power, was a chronicler of the early ages, and in 1130
appears in the Cambrai registers. The Germans used it as Mainhart, and the
English surname Maynard is from it. Meginrat made Meinrad, or powerful
council, and Maginhild is still in use in the North as Magnild.
The main land is, in fact, the chief land, the main, the chief sheet of
water, or sea, and might and main are so closely connected together, that
Maginhild is the most natural step to Mahthild, Main heroine to Might
heroine; for maht is really the modern German macht, and our own might,
and both these mighty names were in early use in Germany. Mahthild was
the wife of the emperor Henry the Fowler, and afterwards became the
sainted abbess of Quedlingburg. Another Swabian Mechtild was canonized
after being abbess of Adilstetten; and so fashionable did the name become,
that all the French maidens, who were not Alix, seem to have been
Mahthild; and in Italy it was borne by the Countess Matilda, the friend of
Gregory VII., whose bequest was one of the pope’s first steps to the
temporal power, and who is introduced by Dante in the flowery fields of
Paradise. The Flemings call it Mahault, and thus term the lady, who, as the
wife of William the Conqueror, brought it to England. Molde, as the
Normans were pleased to term it, was regarded as so decidedly a Norman
name, that the Scottish-Saxon Eadgyth was made to assume it, and it
continued the regnant royal name until it sunk beneath the influences of the
Provençal Alienor. It seems as if Matilde had been freshly introduced in
Flanders when Count Philip married Matilda of Portugal; and this, and the
old traditional Mehaut, went on side by side, just as in England did the full
name Matilda, and the Anglicized Norman contraction Maude. Of late years
Maude has been fashionable, though not so near the original, nor so really
graceful in sound as Matilda. The earlier Mall and Moll were from Matilda,
not Mary, which came much later into use.
The West Saxon Cenbyrht is the same with the German Kunibert; and
Wessex likewise reckoned among her kings Cenfyrth, or able peace,
Cenfus, bold impetuosity; while Mercia has Cenhelm and Cenwulf.
Alternating with these are Cynric, Cynebald, Cynewald, Cyneburh,
Cynethryth, whose first syllable is cyn, kin, or kind, meaning, of course,
kindred or lineage. Some refer Kunibert and Kunigund to this same kin
instead of kuhn. This word cyn is one of those regarded as the root of king,
cyning, the son of his race or kindred.
Another word seems to have had the same double meaning of ability
being strength; for svinn, which is wise in the northern tongues, is in those
of central Europe, strong; the English swith, Gothic swinths, German swind;
whence the present geschwind, and swift; moreover, swindig is much, or
many, in vulgar Dutch, and to swindle is probably to be too much for the
victim.
Suintila was an old Gothic king of Spain, Swithbert, one of the early
Anglo-Saxon missionaries, especially honoured as the converter of the
kindred land of Friesland, where he was revered as St. Swibert. Swithelm
was another Saxon form; but the most noted amongst us was Swithun, the
bishop of Winchester, tutor to King Alfred, and endowed with many
supposed miracles, the best known of which was the forty days' rain, by
which, like other honest English saints, he testified his displeasure at having
his bones meddled with. The Germans have had Swidburg, Swintfried,
Swidger; but in general this has served as a feminine termination, as in
Melicent, Frediswid, and in all the many swiths and swinds of the Franks
and Goths.
Whether this be the root or not, Svein is in the North a strong youth,
generally a servant, but in the form of Svend becoming the favourite name
of the kings of Denmark, belonging to him whom Ethelred’s treachery
brought down on England, where it was called Swayn, and translated into
Latin as Sueno, while Tasso calls the crusading Swend, Sveno. Svinbjorn
occurs in Iceland, and is our Swinburn. Svenke, again, is the active or
slender youth. It is amusing to see how, from a strong man, the swain
became a young man, then a bachelor, then a lover, and, finally, a shepherd.
Another of the mighty words that have been formed into names is vald,
the near relative of the Latin valeo. Our verb to wield continues the Anglo-
Saxon wealdan, which named the wealds of Kent, nay, and the world itself.
Vald still stands alone in the North, and once was the name of a Frank
abbot of Evreux; St. Valdus, in Latin, St. Gaud, in French.
The leading name is, however, Waldheri, Powerful-Warrior appearing as
the young prince of Aquitaine, who, in the curious Latin poem which seems
to represent the Frankish Nibelungenlied in the south of France, flies from
Attila’s court with his fellow-hostage, the Burgundian Hildegunna, and her
treasure, and repulses the pursuing Gunther and Hagano. This same Walther
was said to have afterwards reigned thirty years in Aquitaine, and, no doubt,
the name was already common there, when, about 990, it came to saintly
glory, through a monastic saint of that dukedom, who, being followed by
two others, caused it to be spread far and wide. Indeed, there are twenty-
eight Walters in Domesday, and Cambrai made plentiful use of it in the
same form, till, about 1300, the spelling was altered to the French Gautier.
Walther von Vogelwied, the Minnesinger, who bequeathed a perpetual dole
to the birds of the air at his tomb, well deserved that the memory of his
name should be kept up in Germany, and it has always been very popular.
Wat, as a contraction, is as old as Rufus’s time, and Water was in use, at
least, in Shakespeare’s time, when he shows the prophecy of Suffolk’s death
by water fulfilled by the name of his assassin.
S VII.—Affection.
The Teutons had a few names denoting affection. Dyre is the same in
Norse as our own word dear, or dyr in Anglo-Saxon. An inlet on the north-
west corner of Iceland is still termed Dyrefiord, from one of the first
settlers, and Dyre was the hero of a ballad in the Kæmpeviser, answering to
the Scottish Katharine Janfarie, the original of young Lochinvar. The old
Germans had Dioro and Diura, and the Anglo-Saxons affectionately called
the young sons of their nobility Dyrling, or darling.
Leof, the German lieb, beloved, is much used by the Anglo-Saxons. Two
bishops, one of Wells, and afterwards primate, the other of Crediton, were
called Leofing, or Lyfing. The first was certainly properly Ælfstan, so it is
probable that in both instances Leofing was merely an endearing name that
grew up with them, and displaced the baptismal one; but its Latin
translation, Livingus, shows the origin of the surname of Livingstone.
England also had Leofwine, Beloved friend, the only native name borne
by any of the sons of Earl Godwin. An earlier Leofwine was a member of
St. Boniface’s mission, and converted many of the heathens on the banks of
the Weser; and as St. Lebwin is patron of Deventer, probably occasioned
the name of Lubin, which, from being borne by French peasants, crept into
pastoral poetry.
Another of the same mission party was Leobgytha, or Dear gift, called
also Liuba and Liebe, who was sent for from her convent at Wimborne to
found one of the earliest nunneries in Germany. It is probably from her that
Lievine became an old Cambrecis name.
Leof seems to have been the special prefix of the earls of Mercia, for we
find among them, besides Leofwine, Leofstan and Leofric, the last the best
known for the sake of his wife and of Coventry.
The continental instances of the prefix are among the Spanish Goths,
Liuva, Leovigildo, and Liuvigotona; and among the Franks, Leobhard, or
Liebhard, a saint of Touraine.
The only present survivor of all the varieties is probably, if we exclude
the occasional Puritan Love, the Cornish and Devon feminine Lovedy.
Far more universal are the names derived from the old word vinr, or
wine, meaning friend or object of love, the same which has left a
descendant in the German wonne, affection, and the Scottish adjective
winsome. It is a continual termination, as must have been already observed,
and we had it as a commencement in our great English missionary Winfrith,
or Friend of peace, the Devonian bishop who spread Christianity over
Germany, but who is far better known by the Latin surname which he
assumed, namely, Bonifacius. Winibald was another of our missionary
saints, and Germany has also had Winrad, Winrich, and Winmar, but the
Welsh Wenefred must not be confused with it.
Mild, or mild, is exclusively Saxon; nay, almost exclusively Mercian, for
it only occurs in one family; that of King Merowald, who named his three
daughters Mildgyth, Mildburh, and Mildthryth. All became nuns, the two
latter abbesses, one in Shropshire, the other in the isle of Thanet, and they
were canonized as Milburga and Mildreda. Milborough, as the first became
Anglicized, was found within the last century in Shropshire, and Mildred
was never entirely disused; it belonged to the daughter of Burleigh, and has
lately been much revived, under the notion that it means mild speech; but
red is always masculine, and, as has been before said, thryth commands or
threatens, so that Mildthryth is the gently strict.
S VIII.—Appearance.
Miss Carolina Wilhelmina Amelia Skeggs was verily named after a
beard. Skegg means neither more nor less than a beard, and strange to say,
Bardr and Skegg were both fashionable names in the North; indeed, one
Icelandic gentleman rejoiced in the euphonious title of Bardr Bla-skegg, or
Beard Blue-beard.
But we have an independent name of this class. William de Albini, the
second husband of Henry I.’s widow, Alix of Louvaine, wore moustachios,
which the Normans called gernons, and thus his usual title was William als
Gernons; and as the common ancestor of the Howards and Percys, he left
this epithet to them as a baptismal name, one of the most whimsical of the
entire roll. From the Percys it came to Algernon Sidney; and partly through
his admirers, partly through inheritance, and partly through the love of
trisyllables, has become diffused in England.
Faxe meant the hair or tresses, as may be seen in the names of the horses
of day and night, Skinfaxi and Hrinfaxi. Two instances of it are found in the
Landnama-bok, Faxi, a colonist from the Hebrides, and Faxabrandr, most
likely an epithet due to some peculiarity of hair, probably whiteness, or
perhaps fieriness; but it was not common, though it came to England to be
the surname of Sir Thomas Fairfax.
The name of our excellent friend Wamba in Ivanhoe must probably have
been taken from one of the Visigothic kings of Spain, with whom it was
most likely a nickname, like that of Louis de Gros in France, for it means
nothing but the belly. Epithets like this were not uncommon, and sometimes
were treated as names, such as Mucel, or the big, the sobriquet of the earl of
the Gevini; or Budde, the pudding, the person who showed Knut the way
over the ice. Many of those used in England were Keltic, showing that the
undercurrent of Cymric population must still have been strong.
It is remarkable how very few are the Teuton names taken from the
complexion—in comparison with the many used by the Kelts, and even by
the Romans—either because the Teutons were all alike fair, or because they
thought these casual titles unworthy to be names. Bruno was exclusively
German, and may perhaps be only a nickname, but it came to honour with
the monk of Cologne, who founded the Carthusian order, and has been used
ever since; and the North has Sverke, Sverkir, swarthy or dark, a famous
name among the vikings.
Far more modern is the name of Blanche. The absence of colour is in all
tongues of Western Europe denoted by forms of blec. In Anglo-Saxon, blœc
or blac is the colour black, but blœca is a bleak, empty place, and blœcan is
to bleach or whiten; blœco, like the German bleich, stands for paleness. It is
the same with German and Norse, in the latter of which blakke hund is not a
black dog but a white one. All these, however, used their own weiss or
white for the pure uncoloured snow; while the negative blœc, or colourless,
was adopted by the Romance languages, all abandoning the Latin albus in
its favour. It is literally true that our black is the French white; black and
blanc are only the absence of colour in its two opposite effects.
Blach, Blacheman, Blancus, and Blancard, all appear in Domesday; but
Blanchefleur and Blanche, seem to have been the produce of romance. The
mother of Sir Tristrem was Blanchefleur, a possible translation of some of
the Keltic Gwenns or Finns, and it probably crept from romance to reality
among the poetical people of southern France. The first historical character
so called was Blanca of Navarre, the queen of Sancho IV. of Castille, from
whom it was bestowed on her granddaughter, that child of Eleanor
Plantagenet, whom her uncle, King John, employed as the lure by which to
detach Philippe Auguste from the support of Arthur of Brittany. The treaty
only bore that the son of Philippe should wed the daughter of Alfonso of
Castille; the choice among the sisters was entrusted to ambassadors, and
they were guided solely, by the sound of the name borne by the younger,
that of the elder sister, Urraca, being considered by them hateful to French
ears, and unpronounceable to French lips. John was punished for his policy,
for Blanche’s royal English blood was the pretext of the pope in directing
against him her husband, Louis the Lion, but no choice could have been a
happier one for France, since Blanche of Castille was the first and best of
her many queen-regents.
From her the name became very common in France. One of the daughters
of Edward I. was so called, probably from her, in honour of his friendship
for her son; it became usual among the English nobility, and is most
common in Italy, though it is somewhat forgotten in Spain.
S IX.—Locality.