What Is the Key Advantage of the Sole Proprietorship,beyond the Simplicity

question 57

Multiple Choice

What is the key advantage of the Sole Proprietorship,beyond the simplicity of the commencement of the operation?

• A) the sole proprietor is 100% personally exposed to the liabilities incurred by the business
• B) the sole proprietor has 100% control of the business
• C) the skill set of the business is limited to the skills possessed by the sole proprietor
• D) no real creation of a separate legal business entity
• E) limited to their personal capacity to invest and/or borrow money

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Definitions:

Required Return

The minimum return a investor expects or needs from an investment, considering the risk involved.

Plowback Ratio

The Plowback Ratio, also known as the retention ratio, measures the proportion of earnings that are retained by the company rather than paid out as dividends.

P/E Ratio

Price-to-Earnings Ratio, a valuation metric comparing the current share price of a company to its per-share earnings.

ROE

Return on Equity, a financial ratio that measures the profitability of a corporation in relation to stockholders' equity.