Advantages of a Corporation Include

question 96

Multiple Choice

Advantages of a corporation include:

• A)each stockholder can enter into agreements that legally bind all the stockholders.
• B)the double taxation of distributed profits.
• C)limited liability of the stockholders for the corporation's debts.
• D)each stockholder can conduct business in the name of the corporation.

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Definitions:

Discount Rate

The discount rate utilized in determining the present value of future cash flows through discounted cash flow (DCF) analysis.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment by calculating the present value of expected cash flows minus the initial cost.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Capital Rationing

The practice of limiting investments or expenditures in new projects due to budget constraints or capital availability.