Unlike in a Corporation, the Owners of a Partnership Firm

question 109

Multiple Choice

Unlike in a corporation, the owners of a partnership firm:

• A)have limited claim on the profit made by the business.
• B)are restricted from dissolving the business without prior notice to the SEC.
• C)have an unlimited personal liability for the debts of the business.
• D)are taxed at two levels.

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Definitions:

Firm's Debt

The total amount of money that a company owes to creditors, including loans, bonds, and other financial liabilities.

Put Contracts

Financial derivatives that give the holder the right, but not the obligation, to sell a specific amount of a security at a specified price within a specified time period.

Underlying Stock

The stock that is the basis for a particular derivative instrument, such as an option.

Market Value

The current quoted price at which an asset or company can be bought or sold on the open market.