usace 33% 3:52 PM Read Only - You can\'t save change. .. 33 The stock of a prval

Question

usace 33% 3:52 PM Read Only - You can't save change. .. 33 The stock of a prvale corporation A) is raded onthe New York Slock Exchange B) is not mada available for purchase by the pubic C) D) E) subjects the shareholders to unlimited liability pays no dividends None of the above 34) A corporation whose stock can be purchased by anyone and is traded in stock exchanges is known as aln) A) public corporation B cooperative C) not-lor-prolit coporation D) S corporation E) private corporation 35) Mars. Inc., the maker of M&Ms; and other candy, is 100% owned by the Mars family. This is an example of a(n) A) S cporation B not-lor-prolit coporation C) public corporation D) private corporation 36) Inveslors who purchase shares of stock in a crparalion are is A shareholders B) proprietors C) limited partners D) joint venture partners E) general partners 37) All ol the tollowing are disadvantages ol coporalions EXCEPT A) control by outside investors B start-up cosl and complexity C) liquicity D) double taxation E) govermental reporting requirements 3B) Liquicity means thal Athe slock market has a shorl-te oientation B) the corporation is taking the company puic C) investors can easily and quickly convert their stock into cash. D) shares of stock can be bequeathed to the heirs of shareholders. E) shareholders face only unlimited liability 39) Periccdic distributions o proli that a coporation makes to iis shareholders are called_. A? liquidated assets B eamings per share C) par distributions E) dividends 40 The EBoard fDirectors in a corporation represents the A shareholders B) goverment C) employees E) corporate officers 41) In corporate gowemance, licers f the corporation report to the_. A inwestors C) Board of Directors D) employees E) parent company 5 of 9

Explanation / Answer

33. The stock of a private corporation is not made available for purchase by the public. This is as per the definition of a private cororatin whose stock is not freely traded on the stock exchange. Hence B is the correct choice.

34. A corporation whose stock can be purchased by any one and is traded and traded in stock exchanges is known as a public corporation. this is as per the definition of a public corporation whose stock sre traded freely on the stock exchange. Hence A is the correct choice.

35. Mars Inc. the maker of M&M and other candy is 100% owned by the Mars family. This is an example of a private corporation. This is as per the definition of a private corporation where all or majority of share are concentrated in the hands of few people. Hence D is the correct choice.

36. Investors who purchase shares of stock in a corporation are it's shareholders. This is as per the definition of a shareholder which means any person who purchases shares of any corporation. Hence A is the correct choice.

37. Liquidity is an advantage of a corporation. Hence C is the correct choice.

38. Liquidity means that investors can easily and quickly convert their stock into cash. This is as per the definition of liquidity which means the situation where any asset can be easily and quickly converted into cash. Hence C is the right choice.

39. Periodic distributions of profit that a corporation makes to it's shareholders are called dividends. This is as per the definition of dividend which means any distribution of profit that a corporation makes to it's investors. Hence E is the correct choice.

40. The Board of Directors of a corporation represents the shareholder. Here as per definition the board of directors is elected by the shareholders in an annual general meetng of a company. Hence they represent the shareholders. Hence A is the correct choice.

41. In corporate governance officers of the corporation report to the investors. As per definition of corporate governance the officers of the corporation are accountable to the investors. Hence A is the correct choice.

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