You’ve
probably noticed coverage in the financial press of an initial public
offering (IPO) of a company’s securities. Web search company Google is a
relatively recent example. Is an IPO a primary market transaction or a
secondary-market transaction?
|
A primary market transaction  |
Thursday, 9 August 2012
You’ve probably noticed coverage in the financial press of an initial public offering (IPO) of a
What is the primary disadvantage of the corporate form of organization?
| Requirement 1: |
| What is the primary disadvantage of the corporate form of organization? |
| The double taxation to shareholders of distributed earnings and dividends |
| Requirement 2: |
| What are some of the advantages of corporate organization? |
| Limited liability |
| Ease of transferability |
| Ability to raise capital |
| Unlimited life |
What benefits are there to these types of business organization as opposed to the corporate form?
What benefits are there to these types of business organization as opposed to the corporate form?
| Simpler |
| Less regulation |
| The owners are also the managers |
| Sometimes |
| Personal tax rates are better than corporate tax rates |
What are the four primary disadvantages to the sole proprietorship and partnership forms of business organization?
What are the four primary disadvantages to the sole proprietorship and partnership forms of business organization?
| Unlimited liability |
| Limited life |
| Difficulty in transferring ownership |
| Hard to raise capital funds |
What are the four primary disadvantages to the sole proprietorship and partnership forms of business organization?
What are the four primary disadvantages to the sole proprietorship and partnership forms of business organization?
| Unlimited liability |
| Limited life |
| Difficulty in transferring ownership |
| Hard to raise capital funds |
Below are examples of business transactions. Choose the type of financial management decision that is relevant to each.
Below are examples of business transactions. Choose the type of financial management decision that is relevant to each.
| Deciding whether to expand a manufacturing plant | Capital budgeting |
| Deciding whether to issue new equity and use the proceeds to retire outstanding debt | Capital structure |
| Modifying the firm's credit collection policy with its customers | Working capital management |
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