Why Do Most Sole Proprietorships Remain Relatively Small

question 120

Multiple Choice

Why do most sole proprietorships remain relatively small?

• A) because their shareholders would rather receive dividends than have earnings reinvested to finance growth
• B) because the owners often disagree about the need to take on additional risk associated with growth
• C) because they have limited ability to raise funds needed to finance growth
• D) because government regulations limit their ability to expand into new areas of business