PRIN.OF CORPORATE FINANCE >BI<
12th Edition
ISBN: 9781260431230
Author: BREALEY
Publisher: MCG CUSTOM
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Chapter 1, Problem 4PS
Summary Introduction
To determine: The statements that apply to corporations.
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which of the which of the following statements always apply to corporations
a. unlimited liability
b. limited life
c. ownership can be transferred without affecting operations
e. managers can be fired with no effect on ownership
Which of the following is not an advantage of the corporate form of business organization?
a) unlimited life
b) transferability of ownership
c) limited liabilitiy of stockholders
d) unlimited personal. liability for stockholders
Which of this statement shows the advantage to form a corporation? Select one:
a. Owner must absorb all losses
b. Ability to raise large amounts of capital is increased
c. Control of corporation not guaranteed by partial ownership of stock
d. Business terminates immediately upon death of owner
Chapter 1 Solutions
PRIN.OF CORPORATE FINANCE >BI<
Ch. 1.A - Prob. 1QCh. 1 - Investment and financing decisions Read the...Ch. 1 - Investment and financing decisions Which of the...Ch. 1 - Prob. 3PSCh. 1 - Prob. 4PSCh. 1 - Prob. 5PSCh. 1 - Opportunity cost of capital FH Corp. continues to...Ch. 1 - Corporate goals We can imagine the financial...Ch. 1 - Maximizing shareholder value Ms. Espinoza is...Ch. 1 - Prob. 9PS
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- Owners have no personal liability under which legal business structure? A. a corporation B. a partnership C. a sole proprietorship D. There is liability in every legal business structure.arrow_forwardQuestion one of the features of private companies is that it does not restrict any number of persons becoming shareholders in the company. True or false. Required: state whether the above information is true or false.arrow_forwardThe ability of any stockholder to transfer stock to another person without the knowledge or the consent of the other stockholders and without disturbing the normal activities of the corporation is called a. unlimited life. b. suitability for large scale operations. c. taxation of corporate earnings. d. transferable ownership units.arrow_forward
- Direction: Write T if the statement is correct and F if the statement is incorrect. On the space provided, explain using the concepts discussed why your answer to a statement is T or F. 1. A corporation can be formed by mere agreement among shareholders. 2. Shareholders are not liable to corporate obligations in excess of their contribution. 3. Authority of the corporation to operate has to be granted by the state. 4. Death of a shareholder will dissolve the corporation. 5. Shares cannot be transferred without the consent of the other shareholders. 6. All incorporators are subscribers but a subscriber need not be an incorporator. 7. The ultimate control of the corporation rests with the board of directors. 8. Shareholders can transact business on behalf of the corporation. 9. All incorporators are shareholders but not all shareholders are incorporators. 10. In a corporation, minority shareholders are compliant to the wishes of the majority.arrow_forwardUnder the corporate form of business organization, Group of answer choices a)ownership rights are easily transferred b)a stockholder is personally liable for the debts of the corporation c)stockholders’ acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation d)stockholders wishing to sell their corporate shares must get the approval of other stockholdersarrow_forwardWrite T if the statement is correct and F if the statement is incorrect. On the space provided, briefly explain using the concepts discussed why your answer to a statement is T or F. 1. A person of minor age can be a shareholder but can never be an incorporator in a corporation.arrow_forward
- Which of the following is not an advantage of the corporate form of business? a. limited liability b. easy transferability of shares c. enhanced ability to raise capital d. lack of government regulationarrow_forwardplease answer correct in detail Identify each of the following characteristics as being an advantage or a disadvantage of the corporate form of business or not applicable to the corporate form of business organization. 4. Unlimited liability of owners 5. Government regulations 6. Seperation of ownership and managementarrow_forwardWhich of the following characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? Question 7Answer a. Separate legal entity b. Separation of ownership and management c. Transferability of ownership d. Limited liabilityarrow_forward
- Which of the following characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? a. Separate legal entity b. Separation of ownership and management c. Transferability of ownership d. Limited liabilityarrow_forward1. Which of the following does not affect retained earnings? Choices; Actual payment/distribution of dividends. Board of directors’ decision relating to recapitalization. Adjustment of prior period’s profits Profit of a corporation during the period. 2. The following are characteristics of a corporation except Choices; It is an artificial being It has right of succession Unlimited Liability It is created by operation of lawarrow_forwardMatch the terms to the definition: Receive stipulated dividends, get paid first when there are profits, no say in corporate decisions. Are creditors not owners, get paid first regardless of profit or not, if company goes bankrupt they get paid first Last to get paid, able to vote in matters concerning the corporation A. Common Stock B. Preferred StockC. Bondsarrow_forward
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