Written Assignment - BUS 3301 - Unit 2

Non-Proctor Written Assignment Written Assignment - Unit 2 University of the People BUS 3301 – Financial Accounting Mary Shilpashree , Instructor June 26 th , 2022

Non-Proctor Written Assignment For this assignment, I identify and match the terms to the description listed in the tabular column. Also, I list the advantages and disadvantages of each of these terms using suitable example/s: Description Terms Advantage / disadvantage The ability of a company to raise capital by issuing shares to the public. Publicly Traded Advantage : the corporation owner does not have to run the company only on his own fund, but can raise funds by issuing stocks, or selling bonds on the financial market. Example: GM shares closed at $32.99 on June 24 General Motors Company (GM): NYSE - Nasdaq Real-Time Price. Currency in USD, n. d.); a General Motors bonds offer, 6.25% profit, and will be mature on October 2, 2043 ( International bonds: General Motors, 6.25% 2oct2043, USD USU3821PAC69, n. d.). Disadvantage : the corporation does not belong to the founder alone, and he cannot just own all the profits or do whatever he wants, as decisions are taken by a board of directors voted by all. Ex, General Motors Corp. has Corporate Officers of 17 members and a Board of Directors. But prior, GM has a shareholder assembly with one that happened on June 14, 2021 ( Leadership Team, n. d.) ( General Motors to Host Virtual Annual Shareholder Meeting, n. d.). The ability of an existing shareholder to sell shares without corporate approval Transfera- bility of Ownership Advantage : a shareholder can partly or fully sell their shares when he wants, and cash the money. Like that he has the cash to invest in other businesses or simply to avoid losing too much money. Example: The USA Government sold the last of its shares at GM ( Healey, 2013, December 10). You can then quickly sell your shares if you know a major crisis is coming. Thus, you cash back partly or fully your invested money. Disadvantage : This also means that the board of directors has to deal with new owners and their wills, all depending on their importance in the company. The ability of the government to tax corporate earnings and dividends. Double Taxation Advantage : proof that shareholders are legally not liable for the corporation's debts and lawsuits. Disadvantage : too much money from the corporate goes into taxes payment. Periodic regulatory filings Cost of Regulation Advantage : Legal separation of the corporation from its founders and shareholders, so that only the 2

Non-Proctor Written Assignment Healey, J. R. (2013, December 10). Government sells last of its GM shares. USA Today. https://www.usatoday.com/story/money/cars/2013/12/09/government-treasury-gm-general- motors-tarp-bailout-exit-sale/3925515/ International bonds: General Motors, 6.25% 2oct2043, USD USU3821PAC69. (n. d.). Cbond. https://cbonds.com/bonds/54885/ Leadership Team. (n. d.). General Motors. https://www.gm.com/company/leadership 4