Which of the Following Statements Is CORRECT

question 21

Multiple Choice

Which of the following statements is CORRECT?

• A) A hostile takeover is the main method of transferring ownership interest in a corporation.
• B) Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization.
• C) A corporation is a legal entity that is generally created by a state, and it has a life and existence that is separate from the lives of its individual owners and managers.
• D) Limited liability of its stockholders is an advantage of the corporate form of organization, but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.
• E) Although its stockholders are insulated by limited legal liability, the legal status of the corporation does not protect the firm's managers in the same way, i.e., bondholders can sue its managers if the firm defaults on its debt, even if the default is the result of poor economic conditions.

Identify key elements leading to conflicts among founders and strategies for conflict resolution.

Understand the components of a fully diluted company and the percentage typically set aside for future talent and incentives.

Understand the basic concepts and components of interpersonal communication including semantics, messages, and media richness.

Recognize and apply strategies for effective interpersonal communication in various organizational contexts.

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Definitions:

Risk-Free Rate

The theoretical return on an investment with zero risk, often represented by the yield on government bonds.

Strike Price

The strike price, in options trading, is the price at which the holder of an option contract can buy (call option) or sell (put option) the underlying security or commodity.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price within a particular time frame.

Option Contract

A financial contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specific date.