Which Form of Organization Is Free of Initial Legal Requirements

question 101

Multiple Choice

Which form of organization is free of initial legal requirements?

• A) sole proprietorship
• B) general partnership
• C) corporation
• D) both A and B

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Definitions:

Indirect Bankruptcy Costs

Expenses that are not directly tied to the bankruptcy filing process but arise due to the reduced ability to conduct business efficiently, such as lost sales, diminished reputation, and impaired creditworthiness.

Optimal Capital Structure

The most favorable mix of debt and equity financing a firm can use for funding, minimizing the cost of capital and maximizing shareholder value.

Financial Markets

Financial Markets are platforms that facilitate the trading of financial instruments such as stocks, bonds, currencies, and derivatives.

Capital Structure

The mix of various forms of capital used by firms to fund their operations and growth, typically referring to the blend of debt and equity.