In the Context of Business Designs, One of the Advantages

question 88

Multiple Choice

In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will

• A)lose only their investment in the business rather than their life's savings.
• B)be absolved of responsibility for the debts of the company.
• C)be expected to pool their personal finances to rescue the business.
• D)surrender control of the company to investors.

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Definitions:

Par Value

The nominal or face value of a stock or bond as stated by the issuer, which may differ from its market value.

Coupon Rate

The yearly interest rate provided by a bond, shown as a percentage of the bond's nominal value.

Yield To Maturity

Yield to maturity represents the total return an investor would receive by holding a bond until it matures, including all interest payments and the repayment of principal.

Realized Compound Yield

The reflective measurement of the total returns on an investment, factoring in compounding interest or returns over a specified time frame.