PRIN.OF CORPORATE FINANCE >BI<
12th Edition
ISBN: 9781260431230
Author: BREALEY
Publisher: MCG CUSTOM
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Question
Chapter 32, Problem 16PS
Summary Introduction
To determine: The kind of option is the carried interest.
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Which one of the following is not an advantage of partnership?
a.
Less profit because profit is shared
b.
Increased capital
c.
Increased knowledge and specialist skills
d.
Shared risk
What form of partnership allows some of the investors to limit their liability?
Why an outstanding weakness of a limited partnership interest as an investment is its lack of liquidity or marketability?
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- Which of the following is likely to be included in the restrictive covenants in the limited partnership agreement? Group of answer choices a. Max % to be invested in any one portfolio firm. b. Taking debt c. Co-investment by GPs d. Raising another fund e. all the above.arrow_forwardA partnership is less stable because it can easily disssolved. * What is the basis of capital sharing if the partners do not have an agreement as to of their individual capital contribution?.arrow_forwardExplain the Use of the Limited Partnership in Private and Public Syndicates?arrow_forward
- What is the Use of the Limited Partnership in Private and Public Syndicates?arrow_forwardIn a case where parties agreed on the conversion of the loan into shares in a partnership and yet the new loan remained despite the conversion, is there novation?arrow_forward1. For the risk-return principle implies that the riskier a given course of action, the higherthe expected return must be. (T) (F)2. General partners have unrestricted transferability of ownership, while limited partnersmust have the consent of all partners to transfer their ownership. (T) (F)3. Owners must register and pay yearly fees to their State of residence when establishinga sole proprietorship. (T) (F)4. The purpose of financial markets is to bring borrowers and savers together. (T) (F)5. In Financial markets, borrowers and lenders most both be located in the same country. (T) (F)6. Beginning cash balance + cash flow from operations + cash flow from investingactivities + cash flow from financing activities = ending cash balance. (T) (F)7. On a common size balance sheet, total assets are equal to 100%. (T) (F)8. The income statement shows a company's earnings since it has been in business. (T) (F)9. The balance includes information about the company's assets and liabilities. (T)…arrow_forward
- Which one of the following situation a partnership firm will have goodwill? a. The firm is earning a super profit b. The firm is incurring a loss c. The firm is availing a loan from a bank d. The firm is earning a normal profitarrow_forward_____________ is a disadvantage of Partnership. a. Potential disagreements between partners b. Great range of skills c. Shared responsibilities d. More capitalarrow_forwardChoose the correct. Which of the following is not a reason for the popularity of partnerships as a legal form for businesses?a. Partnerships may be formed merely by an oral agreement.b. Partnerships can more easily generate significant amounts of capital.c. Partnerships avoid the double taxation of income that is found in corporations.d. In some cases, losses may be used to offset gains for tax purposes.arrow_forward
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