BA 350 Week 1,
Proprietorship – A business owned by one individual.
Partnership – A partnership exists when two or more persons associate to conduct a business.
Corporation – A corporation is a legal entity created by a state. The corporation is separate and distinct from its owners and managers.
Limited Partnership – A partnership in which limited partners’ liabilities, investment returns, and control are limited; general partners have unlimited liability and control
Limited Liability Partnership (LLP) – Sometimes called a limited liability company (LLC) combines the limited liability advantage of a corporation with the tax advantages of a partnership.
Professional Corporation – Has most of the benefits of incorporation but the participants are not relieved of professsional (malpractice liability. ………………………
Chapter 1 Question 1.3
A firm’s intrinsic value is an estimate of a stock’s “true” value based on accurate risk and return data. It can be estimated but not measured precisely. The intrinsic value is dictated by the market forces. Fundamental
Chapter 1 Question 1.5
Direct transfers of money and securities occur when a business sells its stocks or bonds directly to savers, without going through any type of financial institution. The business delivers its securities to savers, who in turn give the firm the money it needs.
2. Transfers may also go through an investment banking house which underwrites the issue. An underwriter
Key Input Data for Cumberland Industries (Thousands of dollars)
|Expenses (excluding depreciation) as a percent of sales||85.0%|
|Net fixed assest||$67,000|
|Depr. as a % of net fixed assets||10.0%|