corporate finance hmwk 1

corporate finance hmwk 1 - BUS 360 B: Corporate Finance 1...

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BUS 360 B: Corporate Finance 1 Jaime A. Narbon Professor Brad Young Tuesday, August 28, 2007 Homework Chapter 1 I – Discussion Questions: 1. The main advantages of a sole proprietorship are that it has low organizational costs, operational costs and that it’s of simple decision making. A major drawback of this type of organization is that there is unlimited liability for the owner. 2. The type of partnership that allows some of the investors to limit their liability is a Corporation, and the way in which shareholders enjoy limited liability is by the corporation’s board of directors in their share interest managing function. 3. The group that has the ultimate responsibility for protecting and managing the stockholders’ interest is the board of directors. 4. The document necessary to form a corporation is called Articles of Incorporation. 5. The issue that the Agency Theory examines is the relationship between owners and managers of a corporation. It is important in a public company
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corporate finance hmwk 1 - BUS 360 B: Corporate Finance 1...

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