The Corporation Is a Legal Entity Separate from Its Owners;

question 103

True/False

The corporation is a legal entity separate from its owners; thus it is possible for the corporation to continue even upon the death of one or more shareholders.

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Definitions:

Dividend Discount Model

A method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.

Financial Statements

Papers that offer a summary of a company's financial status, encompassing the balance sheet, income statement, and cash flow statement.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets, used to assess how efficient a company's management is at using its assets.

Capital Structure

The combination of borrowing (debt) and ownership (equity) capital employed by a firm to finance its activities and expansion.