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Exam 4: Types of Business Ownership

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Question 41

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What is the significance of the name preferred stock?

A) It is the type of stock that most investors would rather have.
B) Its claims on dividends are paid before those of ordinary share.
C) The overall return on preferred stock is higher than that on ordinary share.
D) This stock is available only to select individuals associated with the company.
E) This stock provides the most powerful voting rights.

F) A) and E)
G) A) and D)

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Question 42

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Which form of business is the easiest to start?

A) Corporation
B) Partnership
C) Entrepreneurship
D) Sole trader
E) S-corporation

F) A) and D)
G) C) and D)

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Question 43

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Economists, financial analysts, corporate managers, and stockholders all agree that mergers are good for both the company and the economy.

The order of difficulty and expense, from most to least, when forming a business organisation is as follows:

Anyone with the money can purchase shares of Coca-Cola's stock.This makes Coca-Cola a(n) ____ corporation.

Glenn owns and operates a large hardware store in Missouri that employs about fifty people.He delegates some of the decision making to two managers, but he remains the only owner.Glenn's business is organised as a

A partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a

The form of business organisation that experiences double taxation is the

Not-for-profit organisations must meet specific guidelines in order to obtain tax-exempt status.These guidelines are structured by the

Boeing is incorporated in Seattle, Washington.It has a large facility in Huntsville, Alabama, and is considered a(n) ____ because it conducts business within Alabama.

Twenty-five young investors decided that they want to start a dating service; however, they do not want to be held personally liable for losses of the company.They want to avoid double taxation.Which type of business organisation would best fit the needs of these individuals?

A corporation chartered in the UK and doing business in the UK is known as a domestic corporation.

A temporary association organised to perform a specific task requiring a large amount of capital is known as a(n)

Unless specified in the charter, a corporation has a

Of the three common forms of ownership, a corporation can respond to changes in market conditions more rapidly than others can.

A ____ is a merger between firms operating at different but related levels in the production and marketing of a product.

A cooperative provides a service more effectively than any member could by acting alone.

A ____ invests money in the business but has no management responsibility.

Quarrels among business associates have become common.The associates quarrel over what products the firm should sell, division of authority, selection of personnel, whether to bring family members into the business, whether to expand, and who is contributing most to the firm's success.Such feuding, which damages business relationships, occurs most frequently in what form of business?

A distribution of earnings to the stockholders of a corporation is a(n)