One Drawback of Switching from a Partnership to the Corporate

question 14

Multiple Choice

One drawback of switching from a partnership to the corporate form of organization is the following:

• A) It subjects the firm to additional regulations.
• B) It makes it more difficult for the firm to raise additional capital.
• C) It makes the firm's investors subject to greater potential personal liabilities.
• D) It makes it more difficult for the firm's investors to transfer their ownership interests.

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Definitions:

Compounded Quarterly

Interest is calculated four times a year on the initial principal and the added interest from previous periods.

20 Years

A period or duration of two decades.

Compounded Monthly

A term referring to the calculation of interest on the initial principal and also on the accumulated interest from previous periods, computed each month.

6.2%

A percentage expressing a portion, often signifying a rate such as an interest rate, growth rate, or efficiency ratio.