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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Question
![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.
The inability to accumulate capital.
The potential loss of control.
Legal requirements and red tape.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53c66381-45ea-47ab-832a-7c9c7c651951%2Fc34ecb5b-b899-49f1-992f-811fbb926b84%2Fwd0n1m_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
The inability to accumulate capital.
The potential loss of control.
Legal requirements and red tape.
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