Chapter 12 - Financing a Business

Business owners' personal contributions to the business are called

• assets
• equity capital
• debit capital
• stock

Which form of business ownership provides the greatest protection of the owner's personal assets

• sole proprietorship
• partnership
• corporation
• none provide protection of owner's assets

Dividing the corporation's net worth by the total number of shares outstanding is

• book value
• par value
• market value
• selling value

Buying goods and services that do not require immediate payment is a form of financing called

• a line of credit
• trade credit
• a term loan
• a promissory note

An organization that helps a business raise large amounts of capital through bonds or stocks is

• a commercial bank
• a stock exchange
• a venture capital firm
• an investment bank

An example of equity capital is

• personal savings of owner in the business
• money contributed by a new partner
• retained earnings
• all of the answers

The number of shares of stock to be issued by a corporation is determined by

• common stockholders
• preferred stockholders
• company executives
• the board of directors

Another name for an investment bank is

• underwriter
• commercial bank
• factor
• venture capitalist

An open line of credit is similar to using

• venture capital
• a business credit card
• trade credit
• a lease

The price at which stock is actually bought and sold

• book value
• par value
• market value
• selling value