CFIN -STUDENT EDITION-ACCESS >CUSTOM<
6th Edition
ISBN: 9780357752951
Author: BESLEY
Publisher: CENGAGE C
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 1, Problem 19PROB
Summary Introduction
To determine: the likelihood of agency problem in three major forms of business organizations namely, proprietorship, partnership with 5 partners and corporation with 100000 stockholders
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
For the three major forms of business, LLC, partnership, and corporation, discuss two advantages and two disadvantages of each on taxation, equity owner's legal liability, and relative voice in day-to-day business management.
Answer the following question in your own words:
Explain the following corporate structures.
Limited Liability Company (LLC)
Joint Stock Company
General Joint Stock Company (SAOG)
Joint Venture
Holding Company
Commercial Agent
Question-based on forming a business.
I have tried it but incorrect answer. Numbers 2 and 3 are incorrect.
Chapter 1 Solutions
CFIN -STUDENT EDITION-ACCESS >CUSTOM<
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Match each corporate characteristic 1 through 8 with the description that best relates to it. Characteristic Descriptions 1. Transferability of ownership 2. Ability to raise large capital amounts 3. Duration of life 4. Legal status Entity with similar rights as individual 5. Ease of formation High because buying stock is attractive 6. Government regulation Indefinite 7. Mutual agency More severe than partnerships and proprietorships 8. Owner authority and control TT TT Oarrow_forwardBased on the advantages and disadvantages of each of the following forms of businesses, give an example of a business that would be best suited to that particular form. Be sure to explain why that is the best option for the particular business. (1) Sole proprietorship (2) Limited partnership (3) Corporation (4) Limited Liability Companyarrow_forwardAssume that you are studying for an upcoming accounting exam with a good friend. Your friend says that she has a solid understanding of general partnerships but is less sure that she understands organizations that combine certain characteristics of partnerships with other forms of business organization. You offer to make some study notes for your friend to help her learn about limited partnerships, limited liability partnerships, S corporations, and limited liability companies. Prepare a one-page set of well-organized, complete study notes on these four forms of business organization.arrow_forward
- Joint ventures are a common way of doing business nowadays. Explain what a joint venture is, and state what is the required accounting treatment where a 50:50 joint venture exists. Briefly explain why you have chosen this accounting treatment. (500 words)arrow_forwardGo to the Buckeye Partners, L.P. website where forms filed with the SEC are available through the Investment Center. Find Buckeye's recent annual financial statements in their most recent 10-K report for the partnership. Using the interactive data option, review the Condensed Consolidated Statement of Operations, Consolidated Balance Sheets, and the Notes to Financial Statements and answer the questions posed below. 1. When was Buckeye Partners L.P. formed? What is their main business? 2. Who are the limited partners and who are the general partners? 3. Review Buckeye's financial statements as well as the accompanying notes. List and briefly discuss information included for this partnership that would typically not appear in financial statements produced for a corporation. Also comment on similarities between Buckeye's financial statements and those of a corporation.arrow_forwardCompare and contrast the three major forms of business organization which are sole proprietorship, partnership and corporation. Also, relate the scope of the role of a financial manager within these business organization.arrow_forward
- The following describe several different business organizations. Determine whether each description bestrefers to a sole proprietorship (SP), partnership (P), corporation (C), or limited liability company (LLC). AJ Company pays a business income tax and has two owners.arrow_forwardAs the manager of a corporation you decided to open a new branch abroad. Which of the following terms fit best for the decision you made? Select one: a.Controller b.Capital budgeting c.Profit maximization d.Partnershiparrow_forwardDefine and discuss each of the following by providing at least 2 practical examples: 1. Limited Partnership; Limited Liability partnership; Professional corporation? 2. A friend asked you to reveal important financial information of the company, being a finance manager of the company what would you do? Justify by considering ethics in finance. 3. Describe mechanisms that motivate managers to act in stockholders’ best interests, and to overcome agency problem?arrow_forward
- Which of the following statements is correct? Group of answer choices Corporations and partnerships have an advantage over proprietorships because a sole proprietor is subject to unlimited liability, but investors in the other types of businesses are not. Firms in highly competitive industries find it easier to exercise "social responsibility" than do firms in oligopolistic industries. A good goal for a corporate manager is maximization of expected EPS. A good example of an agency relationship is the one between stockholders and managers. Most business in the U.S. is conducted by corporations; corporations' popularity results primarily from their favorable tax treatment.arrow_forwardPublic corporations: Multiple Choice are businesses whose stock is bought and sold on a stock exchange. are businesses owned by two or more people, each of whom is personally liable for the debts of the business. are businesses whose stock is bought and sold privately. are setup for non-profit purposes.arrow_forwardCRITICAL THINKING ASSIGNMENT A corporation is a legal business structure involving one or more individuals (owners) who are legally distinct (separate) from the business that is created under state laws. The owners of a corporation are called stockholders (or shareholders) and may or may not be employees of the corporation. Assuming that a business has been established successfully and operating for the past 5 years in Oman. The president, who is one of the shareholders, has created an innovative new product that is testing well with substantial demand. To begin manufacturing, OMR1 Million additional capital is needed to acquire the equipment and expand the business. Assuming that the company came up with IPO by issuing 1 million shares at 20% premium. (Par value of shares OMR 1 each). The public subscribed all the shares and received all the money. Later the market value of share was OMR 2.500 per share. The company decided to offers a rights issue of 3 for 6 shares at an offer price…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Accounting Basics Explained Through a Story; Author: Leila Gharani;https://www.youtube.com/watch?v=VYNTBWBqncU;License: Standard Youtube License