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Adv n disadv of different forms of business organization
- advantages:
- disadvantages:
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Explain the link between stock price, intrinsic value, and executive compensation
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Importance of business ethics & consequences of unethical beh
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potential conflicts b/t stockholders & managers & b/t stockholders & bondholders? Techniques used to mitigate potential conflicts
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Explain role of finance & different types of jobs?
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Define sarbanes-oxley act
Law passed by congress that requires ceo and cfo to certify that their firm's financial statement are accurate
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define proprietorship
Unincorporated business owned by one individual
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define partnerships
Unincorporated business observed by two or more persons
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define corporations
Legal entity created by a state, separate and distinct from its owners and managers, having unlimited life, easy transferability of ownership, and limited liability
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define S corporation
Special designation that allows small businesses that meet qualifications to be taxed as if they were a proprietorship or a partnership rather than a corporation
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define limited liability co(LLCs)
New type of organization that is a hybrid b/t a partnership and a corporation
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Define limited liability partnership(LLPs)
Hybrid b/t partnership and corporation used for professional firms in acct, law, & architecture. Has limited liability like corporations but taxed like partnerships
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Define stockholder wealth maximization
Primary goal for managers of publicly owned co implies that decisions should be made to maximize the long run value of firms common stock
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define intrinsic value
Estimate of a stocks true value based on accurate risk and return data. Estimated but not measured precisely
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define market price
Stock value based on perceived but possibly incorrect info as seen by marginal investor
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define marginal investor
Investor whose views determine the actual stock price
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Define equilibrium
Actual market price equals the intrinsic value, so investors are indifferent b/t buying or selling a stock
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define business ethics
Company's attitude and conduct towards employees, customers, community, and stockholders
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define corporate raider
Individual who targets a corporation for takeover because it is undervalued
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define hostile takeover
Acquisition of a company over the opposition of its management
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