Summary_Ch01

Summary_Ch01 - Summary This chapter outlines the framework...

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Summary This chapter outlines the framework for the maintenance and creation of shareholder wealth, which should be the goal of the firm and its managers. The commonly accepted goal of profit maximization is contrasted with the more complete goal of the maximization of shareholder wealth. Because it deals well with uncertainty and time in a real-world environment, the maximization of shareholder wealth is found to be the proper goal for the firm. The legal forms of business are examined. The sole proprietorship is a business operation owned and managed by an individual. Initiating this form of business is simple and generally does not involve any substantial organizational costs. The proprietor has complete control of the firm but must be willing to assume full responsibility for its outcomes. The general partnership, which is simply a coming together of two or more individuals, is similar to the sole proprietorship. The limited partnership is another form of partnership sanctioned by states to permit all but one of the partners to have limited liability if this is
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This note was uploaded on 04/16/2008 for the course M 1 taught by Professor N/a during the Spring '08 term at Baylor.

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Summary_Ch01 - Summary This chapter outlines the framework...

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