1. Amy wants to know if inventory is increasing as a percentage of total assets. Which one of these statements most easily provides the information she is seeking?

A. Statement of cash flows

B. Balance sheet

C. Common-size balance sheet

D. Income statement

2. Which one of these would not be paid from free cash flow?

A. Cash dividends

B. Repayment of principal on a long-term debt

C. Repurchase of outstanding shares of common stock

D. New equipment purchase

3. What is the highest marginal rate at which corporate income is taxed?

A. 15%

B. 34%

C. 35%

D. 39%

4. Who pays taxes on earnings distributed as dividends?

A. The issuing corporation

B. The shareholder receiving the dividend

C. Both the issuing corporation and the shareholder

D. Neither the issuing corporation nor the shareholder