A Small Firm That Is Profitable but Provides Only a Very

question 75

Multiple Choice

A small firm that is profitable but provides only a very modest return to the entrepreneur is

• A) an attractive small company.
• B) a high-potential venture.
• C) a franchise.
• D) a microbusiness.

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Definitions:

Authorized

Officially permitted or agreed upon, often referring to the maximum number of shares a corporation is legally allowed to issue.

Outstanding

Refers to shares that are currently owned by investors, including those held by public investors, institutional investors, and company insiders.

Cumulative

Referring to the total amount aggregated over a period of time.

Noncumulative

Noncumulative refers to a type of preferred stock where dividends do not accumulate if they are not declared or paid in a given dividend period.