In Which Form of Organization Would It Be Possible for Individuals

question 6

Multiple Choice

In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions?

• A)Sole proprietorship
• B)Limited partnership
• C)General partnership
• D)Corporation

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote on corporate matters and receive dividends.

Levered Firm

A company that uses debt financing in addition to equity in its capital structure, amplifying both potential gains and losses.

Call Option

This financial instrument endows the acquirer with the right, without enforcing the responsibility, to buy assets such as stocks, bonds, or commodities at a pre-agreed price during a nominated time interval.

Call Option

A financial contract giving the buyer the right but not the obligation to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.