11 which of the following corporate characteristics is a disadvantage of a corporati 4306648

11 which of the following corporate characteristics is a disadvantage of a corporati 4306648

11) Which of the following corporate characteristics is a disadvantage of a corporation?

A) Stockholders of a corporation have limited liability.

B) A corporation has a continuous life.

C) There is no mutual agency among the stockholders and the corporation.

D) Earnings of a corporation are taxed twice.

12) Outstanding stock refers to the ________.

A) shares of stock that are held by the stockholders

B) shares of stock that are sold for the highest price

C) total amount of stock that has been authorized by state law

D) total amount of stock that has not been sold yet

13) Which of the following characteristics is an advantage of the corporate form of business?

A) less degree of government regulation

B) limited liability of stockholders

C) separation of ownership and management

D) low start-up costs

14) Which of the following represents one of the basic rights of stockholders?

A) Stockholders may sell their stock back to the company if they wish.

B) Stockholders may authorize a business contract on behalf of the corporation.

C) Stockholders may receive dividends from corporate earnings.

D) Stockholders may determine at what price the company issues stock.

15) Which of the following is true of stockholders?

A) Stockholders have a right to access confidential information about the business before the information is disseminated to the public.

B) Stockholders can claim a portion of the corporate assets after the corporation pays it debts in the event the company is liquidated.

C) Stockholders may authorize a business contract on behalf of the corporation.

D) Stockholders may determine at what price the company issues stock.

16) The par value of stock is ________.

A) the current selling price of stock

B) the highest price for which a share can sell

C) the price paid if the corporation purchases its own stock back

D) the amount assigned by a company to a share of its stock

17) The two basic sources of stockholders' equity are ________.

A) common stock and bonds

B) common stock and preferred stock

C) paid-in capital and retained earnings

D) loans from banks and gifts from donors

18) Paid-in capital consists of ________.

A) amounts paid by customers

B) capital raised by issuing bonds or preferred stocks

C) earnings generated by the corporation

D) amounts received from stockholders in exchange for stock

19) The retained earnings of a corporation is the ________.

A) internally generated capital that is raised from profitable operations

B) externally generated capital that is contributed by shareholders

C) externally generated capital that is raised from banks and other creditors

D) internally generated capital that from the direct investment of employees

20) Preferred stock is a stock ________.

A) that sells for a very high price

B) that is distributed to employees of the company as a performance incentive

C) that is distributed by corporations to avoid liquidation

D) that gives its owners certain benefits over common stock

21) Which of the following types of stock is considered least risky for investors?

A) common stock

B) par value stock

C) no-par stock

D) preferred stock

22) Preferred stockholders ________.

A) are guaranteed that they will not take a loss on their investment

B) have higher voting rights than common stockholders

C) are sold for a price lower than that of common stock

D) have the first claim on dividend funds

23) Which of the following is true of preferred stock?

A) Preferred stockholders generally receive a fixed amount of dividends before common stockholders do.

B) Preferred stockholders are guaranteed that they will not take a loss on their investment.

C) Preferred stockholders have higher voting rights than common stockholders.

D) Preferred stockholders may sell their shares for a price higher than that of common stock.

24) In the event of liquidation, preferred stockholders ________.

A) are guaranteed to get their investment back in full

B) have first claim on remaining corporate assets after debts are paid

C) may sell their shares for higher amounts than common stock

D) may retain their proportionate share of voting rights

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