Khalil founded the "Taco Factory" 20 years ago as a family-oriented restaurant. Over the years as they grew the business, he incorporated and sold stock to outside investors. Recently the stockholders voted to seek liquor licenses and to sell beer and hard liquor in the restaurants. Khalil opposed this, citing the history of the restaurant's "family" environment, but was voted down. Khalil has experienced which drawback of the corporate form of ownership? The potential for diminished managerial incentives. O The inability to accumulate capital. O The potential loss of control. Legal requirements and red tape.
Khalil founded the "Taco Factory" 20 years ago as a family-oriented restaurant. Over the years as they grew the business, he incorporated and sold stock to outside investors. Recently the stockholders voted to seek liquor licenses and to sell beer and hard liquor in the restaurants. Khalil opposed this, citing the history of the restaurant's "family" environment, but was voted down. Khalil has experienced which drawback of the corporate form of ownership? The potential for diminished managerial incentives. O The inability to accumulate capital. O The potential loss of control. Legal requirements and red tape.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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