F23 - Forms of Business Ownership

Which of these is the equation that we use to calculate a corporation's market cap?

• Share Price X # of Shares = Market Cap

• Share Price / # of Shares = Market Cap

• Share Price + # of Shares = Market Cap

• Share Price - # of Shares = Market Cap

What does GAAP stand for? 

• General Accepted Accounting Principles
• General Accounting Application Process
• Government Approved Accounting Policies
• Generalized Automated Accounting Procedures

Corporations that declare stock splits usually do this when: 

• The company is going bankrupt
• The company's stock price is too high
• The company wants to reduce its dividend payment
• The company is merging with another company

When corporations declare 2:1 stock splits, ____

• the price of each share is halved
• the number of shareholders doubles
• the company's market capitalization doubles
• the company's total assets double

Franchisors are typically _______. 

• Sole proprietorships

• Corporations

• General Partnerships

• Limited Partnerships

Franchisees can be _______. 

• Sole proprietorships

• Corporations

• General Partnerships

• Limited Partnerships

• Any of these

Which form of business ownership accounts for 15 percent of business revenues and involves shared ownership?

• Sole Proprietorship
• Partnership
• Corporation
• Franchising

What is the primary legal disadvantage of sole proprietorships?

• a) Limited liability

• b) Unlimited liability

• c) Tax complexity

• d) Inability to raise capital

Which of these situtations most often presents conflicts between partners, especially if there is not written a partnership agreement?

• a) Filing tax returns

• b) Calculating profits

• c) The death of a partner

• d) Inability to attract qualified employees

Which of these situtations do partnerhsips most often solve with insurance policies? 

• a) Filing tax returns

• b) Calculating profits

• c) The death of a partner

• d) Inability to attract qualified employees