Principle of Business ch4

Chapter 04
Options for Organizing Business
True / False Questions
1. A business's legal form of organization has no effect on how much taxes it pays.
True
False
2. Most sole proprietorships focus on manufacturing.

True
False
3. Lack of control is a disadvantage of sole proprietorships.

True
False
4. Sole proprietorships have the least degree of secrecy.

True
False
5. A sole proprietorship has limited sources of funds, which may affect the growth of the
business.
True
False
6. In the U.S., men are twice as likely as women to start their own business.
True
False
7. If you want to go into business for yourself, the easiest way is with a sole
proprietorship.
True
False
8. Sole proprietorships typically employ fewer than 50 people.

True
False
Multiple Choice Questions

4-1
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9. Sole proprietorships are taxed
A.
B.
C.
D.
E.
as partnerships.
as the owner's personal income.
as shareholders.
as corporations.
depending on the kind of sole proprietorship formed.
10. One of the most popular and easiest to establish forms of business in the United
States is the
A.
B.
C.
D.
E.
partnership.
sole proprietorship.
corporation.
joint venture.
cooperative.
11. About three-quarters of all businesses in the United States are sole proprietorships,
and they account for 10 percent of total business income. We may conclude that
A.
B.
C.
D.
E.
the average corporation is small, but earns little income.

the average corporation hires many people, but makes little income.
the average sole proprietorship is large, but earns little income.
there are many sole proprietorships, but their average income is small.
there are few sole proprietorships, and their average income is small.
12. Which of the following is not a source of funds for a sole proprietorship?
A.
B.
C.
D.
E.
Bank loans
Family members
Personal funds
Selling stock or issuing bonds
Small Business Administration
13. All of the following are advantages of a sole proprietorship except
A.
B.
C.
D.
E.
ease of formation.
secrecy.
unlimited liability.
control of the business.
limited government regulation.
4-2
14. Which of the following is an advantage of a sole proprietorship?
A.
B.
C.
D.
E.
Limited sources of funds

Profits are not shared
Limited liability
Ease of hiring qualified employees
Owner's role as a generalist
15. Ruji has realized that she does not like working for others. She wants to open a
business in which she will have maximum control and the least interference from
government regulation. Which business form might be best for her to use?
A.
B.
C.
D.
E.
Joint venture
Cooperative
Corporation
Partnership
Sole proprietorship
16. The income earned by sole proprietorships is
A.
B.
C.
D.
E.
taxed twice.
not taxable.
taxed as personal income.
taxed too high.
audited less often than others.
17. Barber shops, dog kennels, and independent grocery stores are typically
A.
B.
C.
D.
E.
franchises.
nonprofit agencies.
sole proprietorships.
partnerships.
limited liability partnerships.
18. Which of the following requires owners to perform many functions and possess
diverse skills to make decisions?
A.
B.
C.
D.
E.
Corporation
Partnership
Sole proprietorship
Cooperative
Holding company
4-3
19. Which characteristic of a sole proprietorship can be considered both an advantage

and a disadvantage?
A.
B.
C.
D.
E.
Taxation
Fund sources
Liability
Continuity
Secrecy
20. Which of the following forms of business ownership is directly limited by the life of its
owner?
A.
B.
C.
D.
E.
Sole proprietorships
Limited partnerships
Corporations
Holding companies
Subsidiaries
21. A sole proprietorship is a popular form of business because
A.
B.
C.
D.
E.
it is heavily regulated by the government.

it is taxed more than other forms.
it is hard to dissolve.
the proprietor does not have direct control.
it is easy to form.
Essay Questions
22. What are the advantages of sole proprietorships over other forms of business
organization?
4-4
23. Why is taxation considered both an advantage and a disadvantage of the sole
proprietorship organizational form?
24. What are sole proprietorships? Provide an example.
25. A limited partnership involves a complete sharing in the management of a business.

True
False
26. A limited partnership always has at least one general partner, who assumes
True
False
27. In a partnership, if the goals of one partner change, the result may be friction and
even legal disputes.
True
False
28. All states require partnerships to have articles of partnership.

True
False
4-5
29. Partnerships have fewer regulatory controls than corporations.

True
False
30. In a general partnership, each partner is liable only for the debts he or she incurs.
True
False
31. In a partnership, all partners are equally liable.

True
False
32. Which of the following is not a disadvantage of forming a partnership?
A.
B.
C.
D.
E.
All partners are responsible for all other partners

Unlimited liability
Fewer regulatory controls than in a corporation
The partnership ends when a partner withdraws or dies
Sources of funds are limited
33. When are limited partnerships generally used?
A. When one partner has more money than the others

B. They are used most of the time for many reasons
C.
In law, accounting, and architecture firms
D. When all partners wish to share liability equally
E. When the project is risky and the chance of loss is great
34. Selling an interest in a partnership may be difficult because
A.
B.
C.
D.
E.
partnerships are subject to unlimited liability.

partnerships can't issue bonds.
regulatory controls are strict.
it is difficult to place a value on a share of a partnership.
double taxation occurs.
4-6
35. Anand has been asked to join a new partnership that is developing wind energy
technologies. Because the business is high risk, he does not want to be liable for the
firm's debts if the project should fail. He could still participate as a
A.
B.
C.
D.
E.
general partner.
limited partner.
silent partner.
working partner.
contributor.
36. Which form of business organization is the least used in the U.S.?
A.
B.
C.
D.
E.
S-corporation
Franchise
Sole proprietorship
Corporation
Partnership
37. The legal documents that identify the basic agreements between partners are called
A.
B.
C.
D.
E.
proposals of partnership.
a partnership charter.
agreements of partnership.
articles of partnership.
a partnership contract.
38. Articles of partnership are required by many states for businesses that have two or
more co-owners. The issues covered usually include all of the following except
A.
B.
C.
D.
E.
a statement of what each partner contributes.

how the profits and losses will be divided.
what duties the partners will have.
provisions for leaving the partnership.
classes of stock to be issued.
39. It is easier to raise funds in a partnership than in a sole proprietorship because
A.
B.
C.
D.
E.
more people means greater earning power and credit.

partners have better organizational control.
banks know them better.
partners have more combined experience.
they can issue stock.
4-7
40. The decision-making process in a partnership tends to be faster when the partnership
is
A.
B.
C.
D.
E.
multifaceted.
small.
foreign.
domestic.
large.
41. Which of the following is an advantage of a partnership?
A.
B.
C.
D.
E.
Unlimited liability
Life of partnership
Selling a partnership
Limited funding sources
Ease of formation
42. Which of the following is a disadvantage of a partnership?
A.
B.
C.
D.
E.
Difficulty of selling ownership

Difficulty of forming business
Specialization of partners
Relatively slow decision making
Limited government regulation
43. According to the Internal Revenue Service,
A. profitable partnerships pay taxes before distributing profits.

B. partners report their share of profits as personal income.
C.
partners pay no taxes.
D. partners have the most advantageous tax structure.
E. partnerships do not have to report their income on a tax return.
Essay Questions
4-8
44. How does the taxation of partnerships work? How is this different than with a
corporation?
45. Why is it more difficult to value a partnership share than a share of stock in a
corporation, for example?
46. Define the partnership form of business organization. What are its advantages?
47. While corporations account for the majority of businesses in the United States, they
represent a small percentage of profits.
True
False
4-9
48. S Corporations are more flexible than traditional "C corporations."

True
False
49. Corporations cannot be sued.

True
False
50. In most states, corporations must have "corporation," "incorporated," or "limited" in

their names to show that their owners have limited liability.
True
False
51. Taking a company public means announcing its creation to the public.
True
False
52. The biggest advantage of the corporate form of ownership may be the limited liability
of its owners.
True
False
53. Preferred stockholders receive dividends before common stockholders and have
principle voting rights as well.
True
False
54. A corporation doing business outside the state in which it is chartered is known as
a(n)
A.
B.
C.
D.
E.
private corporation.
multi-state corporation.
domestic corporation.
alien corporation.
foreign corporation.
4-10
55. Corporations distribute profits to their owners in the form of
A.
B.
C.
D.
E.
tax-free dividends.
interest.
retained earnings.
dividends.
bribes.
56. In creating a corporation, once the articles of incorporation are filed with the
appropriate state office, the state may then issue a corporate
A.
B.
C.
D.
E.
chapter.
contract.
charter.
collaboration.
commentary.
57. A private corporation is one that
A. is owned by only a few people and not traded in public markets.

B.
does not pay taxes on its income.
C.
does not hire employees.
D. can be purchased on the New York Stock Exchange.
E. does business outside the nation in which it is incorporated.
58. The type of corporation represented by organizations such as the National
Aeronautics and Space Administration (NASA) and the U.S. Postal Service is called
A.
B.
C.
D.
E.
private.
quasi-private.
public.
quasi-public.
private-public.
59. Which stockholders usually have the right to vote and control the board of directors?
A.
B.
C.
D.
E.
Preferred
Common
Cumulative preferred
Preemptive
Favorite
4-11
60. The right of common stockholders to have the opportunity to purchase new shares of
stock is called a
A.
B.
C.
D.
E.
first offer right.

preemptive right.
stock split right.
profit sharing right.
secondary right.
61. Common stockholders do not have the right to
A.
B.
C.
D.
E.
vote for the board of directors.

share in profits.
attend the stockholders' meetings.
exercise preemptive rights.
receive dividends before preferred stockholders.
62. An important advantage of a corporation is its
A.
B.
C.
D.
E.
single taxation.
limited liability.
ease of formation.
lack of bureaucracy.
double taxation.
63. The type of ownership that has the ability to raise capital most easily is a
A.
B.
C.
D.
E.
public corporation.
general partnership.
limited partnership.
64. Which of the following organizational forms is most expensive to set up?
A.
B.
C.
D.
E.
Sole proprietorship
Limited partnership
General partnership
Cooperative
Corporation
4-12
65. Which of the following forms of business organization restricts the number and type
of shareholder?
A.
B.
C.
D.
E.
Sole proprietorship
Co-op
Limited liability company
S-corporation
Partnership
66. The organizational form that many consider to be a blend of the best characteristics
of corporations, partnerships, and sole proprietorships is the
A.
B.
C.
D.
E.
joint venture.
cooperative.
C corporation.
S corporation.
limited liability company.
67. A written authorization assigning a stockholder's voting privilege to another is a
A.
B.
C.
D.
E.
stock sale.
stock certificate.
stock split.
dividend restructuring.
proxy.
68. Joint ventures are popular in situations that call for
A.
B.
C.
D.
E.
reduced regulations.
cooperation among farmers or ranchers.
large investments.
small investments.
69. All of the following are advantages of a corporation except
A.
B.
C.
D.
E.
limited liability.
lower frequency of taxation.
perpetual life of organization.
ease of transfer of ownership.
external funding sources.
4-13
70. The group of individuals elected by the stockholders to oversee the general operation
of a corporation are known as the
A.
B.
C.
D.
E.
middle managers.
top managers.
board of directors.
shareholders.
owners.
Essay Questions
71. What is a limited liability company (LLC), and why do some consider it the best form
of business ownership?
72. How do preferred stockholders differ from the common stockholders of a

corporation?
4-14
73. A conglomerate merger results when two firms in unrelated industries merge.
True
False
74. Most tender offers are considered hostile.

True
False
75. When firms that make and sell similar products to the same customers merge, it is
known as a horizontal merger.
True
False
76. A merger occurs when one company buys another by buying its stock.
True
False
77. Shark repellant is a method of thwarting a corporate takeover in which management

requires a large majority of stockholders to approve the takeover.
True
False
78. A leveraged buyout is an organization composed of small businesses that have

banded together to reap the benefits of belonging to a larger organization.
True
False
79. The government usually will scrutinize high-profile mergers and acquisitions to
ensure that they are not creating monopolies.
True
False
80. Companies of all sizes grow and improve profitability by
A.
B.
C.
D.
E.
choosing the right kind of organizational structure.

sticking to domestic markets.
not utilizing new technologies as they become available.
expanding their operations.
creating franchises.
4-15
81. When firms that make and sell similar products to the same customers merge, it is
known as a
A.
B.
C.
D.
E.
horizontal merger.
vertical merger.
acquisition.
hostile takeover.
poison pill.
82. When a firm is facing a hostile takeover attempt, it may issue a poison pill, which is
A. when it fires its board of directors for incompetence.

B. when the firm allows stockholders to buy up shares of stock at lower than market
value.
C. when the executive suite quits en masse before a takeover.
D.
a term for plummeting stock values.
E. a letter that expresses dismay at the maneuver sent to the company attempting
the takeover.
83. When two companies combine to form a new company, it is called a(n)
A.
B.
C.
D.
E.
merger.
acquisition.
tender offer.
leveraged buyout.
white knight.
84. When a company offers to buy some or all of another company's stock at a premium
price, it is a(n)
A.
B.
C.
D.
E.
acquisition.
leveraged buyout.
merger.
hostile offer.
tender offer.
4-16
85. When a group of investors borrows money to buy a company or division, using the
company's assets to guarantee the loan, it is called a(n)
A.
B.
C.
D.
E.
acquisition.
merger.
leveraged buyout.
tender offer.
poison pill.
86. Big City Financial is attempting to avoid a hostile takeover by a corporate raider by
allowing stockholders to buy more shares of stock at prices lower than current market
value. Which of the following methods is being used to avoid the takeover?
A.
B.
C.
D.
E.
A leveraged buyout
A tender offer
A white knight
A poison pill
Shark repellant
87. When companies operating at different, but related, levels of an industry merge, it is
known as a(n)
A.
B.
C.
D.
E.
vertical merger.
horizontal merger.
acquisition.
leveraged buyout.
diagonal merger.
88. When discussing corporations, what is a white knight?
A.
A mythical hero in fairy tales
B. An attempt to fend off a hostile takeover by selling stock at below market value
C. An attempt to fend off a hostile takeover by requiring the deal be approved by a
large majority of shareholders
D. A more acceptable firm that is willing to acquire the firm threatened by hostile
takeover
E. A group of investors that has borrowed money to acquire a firm
Essay Questions
4-17
89. What is a vertical merger and why would a firm attempt one? What are the benefits?
90. What is a leveraged buyout? What are some of the advantages of mergers and
acquisitions?
91. Bryan thinks their plant resale company should be a corporation because
A.
it is cheaper.
B.
all good businesses are corporations.
C. they would have limited liability and seem larger.
D. the other forms of corporation are not valid in their case.
E. Bryan does not think the company should be a corporation.
92. Thomas thinks that organizing as a partnership would be best because
A.
it is the most complicated to form.
B. they are a small company and do not need to be a corporation.
C.
it gives them limited liability.
D. it would allow them to rely on their own financial resources and talents.
E. they would have an easier time selling the business later.
4-18
Essay Questions
93. What are some of the advantages and disadvantages of Thomas and Bryan forming a
corporation?
94. What are the advantages and disadvantages of their forming a partnership?
95. Which organizational form do you think would be best for Thomas and Bryan's
company and why?
4-19
Chapter 04 Options for Organizing Business Answer Key
1.
A business's legal form of organization has no effect on how much taxes it pays.
FALSE
A business's legal form of ownership affects how it operates, how much taxes it
pays, and how much control its owners have.
AACSB: Reflective Thinking

Blooms: Remember
Learning Objective: 04-01 Define and examine the advantages and disadvantages of the sole proprietorship
form of organization.
Level of Difficulty: 1 Easy
Topic: Introduction
2.
Most sole proprietorships focus on manufacturing.

FALSE
Sole proprietorships generally focus on services, rather than manufacturing
because manufacturing requires much larger capital outlays.

Blooms: Remember
Topic: Sole Proprietorships
3.
Lack of control is a disadvantage of sole proprietorships.

FALSE
The sole proprietor has complete control over the business and can make
decisions on the spot without anyone else's approval.

Blooms: Remember
4-20
4.
Sole proprietorships have the least degree of secrecy.

FALSE
A sole proprietor does not have to discuss his or her operating plans publically nor
does he or she have to disclose financial reports.

Blooms: Remember
Level of Difficulty: 2 Medium
5.
A sole proprietorship has limited sources of funds, which may affect the growth of
the business.
TRUE
The few sources of money available to the sole proprietorship are a bank, family,
friends, the Small Business Administration, and his or her personal funds.

Blooms: Remember
6.
In the U.S., men are twice as likely as women to start their own business.
TRUE
Sole proprietorships constitute three-quarters of all businesses in the U.S., and
men are twice as likely as women to start their own business.

Blooms: Remember
Level of Difficulty: 3 Hard
4-21
7.
If you want to go into business for yourself, the easiest way is with a sole
proprietorship.
TRUE
Forming a sole proprietorship is easy and inexpensive because of the simple
management structure, the low cost of permits, and the lack of lawyer
involvement.

Blooms: Remember
8.
Sole proprietorships typically employ fewer than 50 people.

TRUE
Sole proprietorships are small businesses and usually employ fewer than 50
people.

Blooms: Remember
9.
Sole proprietorships are taxed
A.
B.
C.
D.
E.
as partnerships.
as the owner's personal income.
as shareholders.
as corporations.
depending on the kind of sole proprietorship formed.
Profits from sole proprietorships are considered personal income and are taxed at
individual tax rates.

4-22
Blooms: Remember
10.
One of the most popular and easiest to establish forms of business in the United
States is the
A.
B.
C.
D.
E.
partnership.
corporation.
joint venture.
cooperative.
Forming a sole proprietorship is easy and inexpensive because of the simple

management structure, the low cost of permits, and the lack of lawyer
involvement.

Blooms: Remember
11.
About three-quarters of all businesses in the United States are sole proprietorships,
and they account for 10 percent of total business income. We may conclude that
A.
B.
C.
D.
E.
the average corporation is small, but earns little income.

the average corporation hires many people, but makes little income.
the average sole proprietorship is large, but earns little income.
there are many sole proprietorships, but their average income is small.
there are few sole proprietorships, and their average income is small.
If 72 percent of all businesses are sole proprietorships, we can conclude that many
are in existence. If sole proprietorships only contribute 10 percent of total business
income, we can conclude that is a small percentage of total income.
AACSB: Analytic
Blooms: Understand
4-23
12.
Which of the following is not a source of funds for a sole proprietorship?
A.
B.
C.
D.
E.
Bank loans
Family members
Personal funds
Selling stock or issuing bonds
Small Business Administration
The few sources of money available to the sole proprietorship are banks, family,
friends, the Small Business Administration, and his or her personal funds. Selling
stock or issuing bonds is only applicable to corporations.

Blooms: Remember
13.
All of the following are advantages of a sole proprietorship except
A.
B.
C.
D.
E.
ease of formation.
secrecy.
control of the business.
limited government regulation.
Unlimited liability is a disadvantage of a sole proprietorship because the owner

may be forced to use personal assets such as a car or home to pay off debt.

Blooms: Remember
4-24
14.
Which of the following is an advantage of a sole proprietorship?
A.
B.
C.
D.
E.
Limited sources of funds

Profits are not shared
Limited liability
Ease of hiring qualified employees
Owner's role as a generalist
A sole proprietorship is easy and inexpensive to form; it has the greatest degree of
secrecy; all profits belong to the owner; it has complete control; it has the most
freedom from government regulation; the owner pays one income tax; and the
business can be easily dissolved.

Blooms: Remember
15.
Ruji has realized that she does not like working for others. She wants to open a
business in which she will have maximum control and the least interference from
government regulation. Which business form might be best for her to use?
A.
B.
C.
D.
E.
Joint venture
Cooperative
Corporation
Partnership
Sole proprietorship

Blooms: Understand
4-25
16.
The income earned by sole proprietorships is
A.
B.
C.
D.
E.
taxed twice.
not taxable.
taxed as personal income.
taxed too high.
audited less often than others.
Profits from the sole proprietorship are considered personal income to the sole
proprietor and are taxed at individual tax rates.

Blooms: Remember
17.
Barber shops, dog kennels, and independent grocery stores are typically
A.
B.
C.
D.
E.
franchises.
nonprofit agencies.
sole proprietorships.
partnerships.
limited liability partnerships.
Sole proprietorships are small businesses such as restaurants, barber shops, flower
shops, dog kennels, and independent grocery stores.

Blooms: Remember
4-26
18.
Which of the following requires owners to perform many functions and possess
diverse skills to make decisions?
A.
B.
C.
D.
E.
Corporation
Partnership
Sole proprietorship
Cooperative
Holding company
The sole proprietor must be able to perform many functions and possess skills in
diverse fields such as management, marketing, accounting, finance, bookkeeping,
and personnel.

Blooms: Remember
19.
Which characteristic of a sole proprietorship can be considered both an advantage

and a disadvantage?
A.
B.
C.
D.
E.
Taxation
Fund sources
Liability
Continuity
Secrecy
Under current tax rates, small corporations with income less than $75,000 pay a
lower marginal tax rate than a sole proprietorship; however, sole proprietorships
avoid the double taxation that occurs with corporations.

Blooms: Understand
4-27
20.
Which of the following forms of business ownership is directly limited by the life of
its owner?
A.
B.
C.
D.
E.
Sole proprietorships
Limited partnerships
Corporations
Holding companies
Subsidiaries
The life expectancy of a sole proprietorship is directly related to that of the owner
and his or her ability to work.

Blooms: Understand
21.
A sole proprietorship is a popular form of business because
A.
B.
C.
D.
E.
it is heavily regulated by the government.

it is taxed more than other forms.
it is hard to dissolve.
the proprietor does not have direct control.
it is easy to form.

Blooms: Understand
Essay Questions
4-28
22.
What are the advantages of sole proprietorships over other forms of business
organization?
The advantages of sole proprietorships are: ease and cost of formation; high
degree of secrecy; all profits belong exclusively to the owner; high degree of
flexibility and control of the business; most freedom from government regulation;
profits are considered personal income and are taxed at individual tax rates; and a
sole proprietorship can be dissolved easily.

Blooms: Understand
23.
Why is taxation considered both an advantage and a disadvantage of the sole

proprietorship organizational form?
Taxation is an advantage because owners of sole proprietors only have to pay one
tax at the owner's individual tax rate. However, this advantage can become a
disadvantage for businesses earning less than $75,000 because owners will pay a
higher marginal tax rate than do small corporations. This is one reason that some
people opt to incorporate.

Blooms: Understand
24.
What are sole proprietorships? Provide an example.
Sole proprietorships are owned and operated by one individual and are the most
popular form of business organization in the United States. Examples include most
restaurants, barber shops, flower shops, financial advisors, child care providers,
and independent grocery stores.

Blooms: Understand
4-29

25.
A limited partnership involves a complete sharing in the management of a

business.
FALSE
A general partnership involves a complete sharing in the management of a
business.

Blooms: Remember
Learning Objective: 04-02 Identify two types of partnership; and evaluate the advantages and disadvantages of
the partnership form of organization.
Topic: Partnerships
26.
A limited partnership always has at least one general partner, who assumes
TRUE
A limited partnership has at least one general partner, who assumes unlimited
liability, and at least one limited partner, whose liability is limited to his or her
investment in the business.

Blooms: Remember
Topic: Partnerships
27.
In a partnership, if the goals of one partner change, the result may be friction and
even legal disputes.
TRUE
If there is a change in goals of one partner and not the other, it may cause friction
and many partner disputes wind up in court or mediation.

Blooms: Remember
4-30
Topic: Partnerships
28.
All states require partnerships to have articles of partnership.

FALSE
Most states require articles of partnership but even if they are not required, it
makes good sense for partners to draw them up.

Blooms: Remember
Topic: Partnerships
29.
Partnerships have fewer regulatory controls than corporations.

TRUE
Similar to a sole proprietorship, a partnership has fewer regulatory controls than
corporations such as publically disclosing financial statements.

Blooms: Remember
Topic: Partnerships
30.
In a general partnership, each partner is liable only for the debts he or she incurs.
FALSE
In a general partnership, each partner has unlimited liability for the debts of the
business.

Blooms: Remember
Topic: Partnerships
4-31
31.
In a partnership, all partners are equally liable.

FALSE
If one partner's personal financial resources are much greater than another
partner's resources, he or she would have more financial responsibility in times of
financial trouble. Also, under a limited partnership, the limited partner(s) is only
liable for his/her initial investment.

Blooms: Remember
Topic: Partnerships
32.
Which of the following is not a disadvantage of forming a partnership?
A.
B.
C.
D.
E.
All partners are responsible for all other partners

Unlimited liability
Fewer regulatory controls than in a corporation
The partnership ends when a partner withdraws or dies
Sources of funds are limited
The presence of fewer regulatory controls is an advantage of partnerships.

Blooms: Remember
Topic: Partnerships
4-32
33.
When are limited partnerships generally used?
A.
B.
C.
D.
E.
When one partner has more money than the others

They are used most of the time for many reasons
In law, accounting, and architecture firms
When all partners wish to share liability equally
When the project is risky and the chance of loss is great
Limited partnerships exist for risky investment projects where the chance of loss is
great.

Blooms: Remember
Topic: Partnerships
34.
Selling an interest in a partnership may be difficult because
A.
B.
C.
D.
E.
partnerships are subject to unlimited liability.

partnerships can't issue bonds.
regulatory controls are strict.
it is difficult to place a value on a share of a partnership.
double taxation occurs.
Unless a method of valuation is specified in the articles of partnership, it is difficult

to place a value on a share of a partnership because no public value is placed on
the partnership.

Blooms: Remember
Topic: Partnerships
4-33
35.
Anand has been asked to join a new partnership that is developing wind energy
technologies. Because the business is high risk, he does not want to be liable for
the firm's debts if the project should fail. He could still participate as a
A.
B.
C.
D.
E.
general partner.
limited partner.
silent partner.
working partner.
contributor.
A limited partner's liability is limited to his or her initial investment in the business.
Limited partnerships are most often used for risky investments where the chance
for loss is great.

Blooms: Understand
Topic: Partnerships
36.
Which form of business organization is the least used in the U.S.?
A.
B.
C.
D.
E.
S-corporation
Franchise
Sole proprietorship
Corporation
Partnership
Partnerships are the least used form of business.

Blooms: Remember
Topic: Partnerships
4-34
37.
The legal documents that identify the basic agreements between partners are
called
A.
B.
C.
D.
E.
proposals of partnership.
a partnership charter.
agreements of partnership.
articles of partnership.
a partnership contract.
Articles of partnership are legal documents that usually specify the money or
assets that each partner has contributed, each partner's role, how the profits and
losses will be divided, and how a partner may leave the partnership.

Blooms: Remember
Topic: Partnerships
38.
Articles of partnership are required by many states for businesses that have two or
more co-owners. The issues covered usually include all of the following except
A.
B.
C.
D.
E.
a statement of what each partner contributes.

how the profits and losses will be divided.
what duties the partners will have.
provisions for leaving the partnership.
classes of stock to be issued.
Articles of partnership are legal documents that usually specify the money or
assets that each partner has contributed, each partner's role, how the profits and
losses will be divided and how a partner may leave the partnership. Stock is not
issued in a partnership.

Blooms: Understand
Topic: Partnerships
4-35
39.
It is easier to raise funds in a partnership than in a sole proprietorship because
A.
B.
C.
D.
E.
more people means greater earning power and credit.

partners have better organizational control.
banks know them better.
partners have more combined experience.
they can issue stock.
When a business has several partners, it has the benefit of pooled financial
resources.

Blooms: Remember
Topic: Partnerships
40.
The decision-making process in a partnership tends to be faster when the

partnership is
A.
B.
C.
D.
E.
multifaceted.
small.
foreign.
domestic.
large.
Small partnerships can react quickly to changes in the business environment than
can large partnerships and corporations.

Blooms: Remember
Topic: Partnerships
4-36
41.
Which of the following is an advantage of a partnership?
A.
B.
C.
D.
E.
Unlimited liability
Life of partnership
Selling a partnership
Limited funding sources
Ease of formation
The advantages of a partnership are ease of formation, availability of capital and

credit, combined knowledge and skills, ability to react quickly to changes, and lack
of regulatory controls.

Blooms: Remember
Topic: Partnerships
42.
Which of the following is a disadvantage of a partnership?
A.
B.
C.
D.
E.
Difficulty of selling ownership

Difficulty of forming business
Specialization of partners
Relatively slow decision making
Limited government regulation
Because it is difficult to place a value on a partnership, difficulty of selling a

partnership is a distinct disadvantage of the partnership form of business.

Blooms: Understand
Topic: Partnerships
4-37
43.
According to the Internal Revenue Service,
A.
B.
C.
D.
E.
profitable partnerships pay taxes before distributing profits.

partners report their share of profits as personal income.
partners pay no taxes.
partners have the most advantageous tax structure.
partnerships do not have to report their income on a tax return.
Partners must report their share of profits on their individual tax returns and pay
taxes at the income tax rate for individuals.

Blooms: Remember
Topic: Partnerships
Essay Questions
44.
How does the taxation of partnerships work? How is this different than with a
corporation?
Partnerships are quasi-taxable organizations. This means that partnerships do not

pay taxes when submitting the partnership tax return to the Internal Revenue
Service. The tax return provides information about the profitability of the
organization and the distribution of profits among the partners. Partners must
report their share of profits on their individual tax returns and pay taxes at the
income tax rate for individuals.
This is different than under a corporation, where the founders of the organization
must pay personal taxes on their income, as well as taxes on the business.

Blooms: Understand
Topic: Partnerships
4-38
45.
Why is it more difficult to value a partnership share than a share of stock in a

corporation, for example?
Because no public value is placed on the business (such as the current trading
price of a corporation's stock), potential partners do not know what one
partnership share is worth. Moreover, because partnership shares cannot be
bought and sold easily in public markets, potential owners may not want to tie up
their money in assets that cannot be readily sold on short notice.

Blooms: Understand
Topic: Partnerships
46.
Define the partnership form of business organization. What are its advantages?
A partnership is defined by the Uniform Partnership Act as "an association of two

or more people who carry on as co-owners of a business for profit." Partnerships,
the least used form of business organization, are typically larger than sole
proprietorships but smaller than corporations. Advantages of partnerships include
ease of organization, availability of capital and credit, diversity of management
skills, ability to react more quickly to changes in the business environment, and
fewer regulatory controls.

Blooms: Understand
Topic: Partnerships
4-39
47.
While corporations account for the majority of businesses in the United States,
they represent a small percentage of profits.
FALSE
Corporations account for the majority of U.S. sales and income, although there are
many more sole proprietorships than there are corporations.

Blooms: Remember
Learning Objective: 04-03 Describe the corporate form of organization; and cite the advantages and
disadvantages of corporations.
Topic: Corporations
48.
S Corporations are more flexible than traditional "C corporations."

TRUE
Many smaller firms elect to incorporate as "S Corporations," which operate under
slightly different rules and have greater flexibility than do traditional "C
Corporations."

Blooms: Remember
Topic: Corporations
49.
Corporations cannot be sued.

FALSE
Corporations have similar rights to that of a person; they can enter contracts with
individuals or other legal entities and they can sue and be sued in court.

Blooms: Remember
Topic: Corporations
4-40
50.
In most states, corporations must have "corporation," "incorporated," or "limited"

in their names to show that their owners have limited liability.
TRUE
In most states, a corporation's name must end in "company," "corporations,"
"incorporated," or "limited" to show that their owners have limited liability.

Blooms: Remember
Topic: Corporations
51.
Taking a company public means announcing its creation to the public.

FALSE
"Going public" through an initial public offering (IPO) means becoming a public
corporation by selling its stock so it can be traded in public markets.

Blooms: Remember
Topic: Corporations
52.
The biggest advantage of the corporate form of ownership may be the limited
liability of its owners.
TRUE
The biggest advantage of a corporation is limited liability because the
corporation's assets and liabilities are separate from its owners'.

Blooms: Remember
Topic: Corporations
4-41
53.
Preferred stockholders receive dividends before common stockholders and have

principle voting rights as well.
FALSE
Preferred stockholders do not have voting rights, but they do receive dividend
payouts before common stockholders.

Blooms: Remember
Topic: Corporations
54.
A corporation doing business outside the state in which it is chartered is known as

a(n)
A.
B.
C.
D.
E.
multi-state corporation.
domestic corporation.
alien corporation.
foreign corporation.
A foreign corporation does business outside the state in which it was chartered.

Blooms: Remember
Topic: Corporations
4-42
55.
Corporations distribute profits to their owners in the form of
A.
B.
C.
D.
E.
tax-free dividends.
interest.
retained earnings.
dividends.
bribes.
Dividends are profits of a corporation that are distributed in the form of cash
payments to stockholders.

Blooms: Remember
Topic: Corporations
56.
In creating a corporation, once the articles of incorporation are filed with the
appropriate state office, the state may then issue a corporate
A.
B.
C.
D.
E.
chapter.
contract.
charter.
collaboration.
commentary.
The state issues a corporate charter to the company based on the information of
the articles of incorporation.

Blooms: Remember
Topic: Corporations
4-43
57.
A private corporation is one that
A.
B.
C.
D.
E.
is owned by only a few people and not traded in public markets.

does not pay taxes on its income.
does not hire employees.
can be purchased on the New York Stock Exchange.
does business outside the nation in which it is incorporated.
A private corporation is owned by one person or a few people who are closely
involved in managing the business and own all of the corporation's stock; none of
the firm's stock is traded in public markets.

Blooms: Remember
Topic: Corporations
58.
The type of corporation represented by organizations such as the National

Aeronautics and Space Administration (NASA) and the U.S. Postal Service is called
A.
B.
C.
D.
E.
private.
quasi-private.
public.
quasi-public.
private-public.
Quasi-public corporations are owned by the federal, state, or local government and
focus on providing a public service rather than earning a profit. Examples include
NASA and the U.S. Postal Service.

Blooms: Remember
Topic: Corporations
4-44
59.
Which stockholders usually have the right to vote and control the board of
directors?
A.
B.
C.
D.
E.
Preferred
Common
Cumulative preferred
Preemptive
Favorite
Common stockholders are the voting owners of a corporation because they are
usually entitled to one vote per share of common stock and they elect the board of
directors.

Blooms: Remember
Topic: Corporations
60.
The right of common stockholders to have the opportunity to purchase new shares
of stock is called a
A.
B.
C.
D.
E.
first offer right.

preemptive right.
stock split right.
profit sharing right.
secondary right.
When a corporation decides to sell new shares of common stock in the

marketplace, common stockholders have a preemptive right to purchase enough
new shares to maintain their percentage of ownership in the corporation.

Blooms: Remember
Topic: Corporations
4-45
61.
Common stockholders do not have the right to
A.
B.
C.
D.
E.
vote for the board of directors.

share in profits.
attend the stockholders' meetings.
exercise preemptive rights.
receive dividends before preferred stockholders.
Preferred stockholders receive profits, in the form of dividends, before any other
stockholder of a corporation.

Blooms: Remember
Topic: Corporations
62.
An important advantage of a corporation is its
A.
B.
C.
D.
E.
single taxation.
limited liability.
ease of formation.
lack of bureaucracy.
double taxation.
The biggest advantage of a corporation is limited liability because the

corporation's assets and liabilities are separate from its owners'.

Blooms: Remember
Topic: Corporations
4-46
63.
The type of ownership that has the ability to raise capital most easily is a
A.
B.
C.
D.
E.
public corporation.
general partnership.
limited partnership.
The public corporation finds it easiest to raise money because it can issue stocks
or bonds when it needs to raise capital.

Blooms: Understand
Topic: Corporations
64.
Which of the following organizational forms is most expensive to set up?
A.
B.
C.
D.
E.
Sole proprietorship
Limited partnership
General partnership
Cooperative
Corporation
The formation of a corporation can be costly due to the need of an attorney's

services and annual fees paid to maintain the charter.

Blooms: Understand
Topic: Corporations
4-47
65.
Which of the following forms of business organization restricts the number and
type of shareholder?
A.
B.
C.
D.
E.
Sole proprietorship
Co-op
Limited liability company
S-corporation
Partnership
S corporations have restrictions on the number (75) and types (individuals,

estates, and certain trusts) of shareholders.

Blooms: Remember
Topic: Other Types of Ownership
66.
The organizational form that many consider to be a blend of the best

characteristics of corporations, partnerships, and sole proprietorships is the
A.
B.
C.
D.
E.
joint venture.
cooperative.
C corporation.
S corporation.
limited liability company.
A limited liability company (LLC) is a form of business ownership that provides

limited liability, as in a corporation, but is taxed like a partnership.

Blooms: Remember
4-48
67.
A written authorization assigning a stockholder's voting privilege to another is a
A.
B.
C.
D.
E.
stock sale.
stock certificate.
stock split.
dividend restructuring.
proxy.
A proxy is a written authorization by which stockholders assign their voting

privilege to someone else, who then votes for his or her choice at the stockholders'
meeting.

Blooms: Remember
Topic: Corporations
68.
Joint ventures are popular in situations that call for
A.
B.
C.
D.
E.
reduced regulations.
cooperation among farmers or ranchers.
large investments.
small investments.
A joint venture is a partnership established for a specific project or for a limited

time and it is popular in situations that call for large investments.

Blooms: Remember
4-49
69.
All of the following are advantages of a corporation except
A.
B.
C.
D.
E.
limited liability.
lower frequency of taxation.
perpetual life of organization.
ease of transfer of ownership.
external funding sources.
The advantages of a corporation are limited liability, ease of transfer of ownership,

perpetual life, external sources of funds and expansion potential.

Blooms: Remember
Topic: Corporations
70.
The group of individuals elected by the stockholders to oversee the general

operation of a corporation are known as the
A.
B.
C.
D.
E.
middle managers.
top managers.
board of directors.
shareholders.
owners.
A board of directors is elected to oversee the general operation of a corporation as

well as ensure that long range objectives are achieved on schedule.

Blooms: Remember
Topic: Corporations
Essay Questions
4-50
71.
What is a limited liability company (LLC), and why do some consider it the best
form of business ownership?
A limited liability company (LLC) is a form of business ownership that provides

limited liability, as in a corporation, but is taxed like a partnership. Although
relatively new in the United States, LLCs have existed for many years abroad.
Many consider the LLC a blend of the best characteristics of corporations,
partnerships, and sole proprietorships. One of the major reasons for the LLC form
of ownership is to protect the members' personal assets in case of lawsuits. LLCs
are flexible, simple to run, and do not require the members to hold meetings, keep
minutes, or make resolutions, all of which are necessary in corporations.

Blooms: Understand
72.
How do preferred stockholders differ from the common stockholders of a

corporation?
While common stockholders usually have voting rights and share in profits,
preferred stockholders have no vote in the election of the board of directors but
get a preference in the distribution of the company's profits. Preferred stockholders
have first claim to profits, usually paid at a fixed percentage of the initial issuing
price.

Blooms: Understand
Topic: Corporations
4-51
73.
A conglomerate merger results when two firms in unrelated industries merge.

TRUE
A conglomerate merger results when two firms in unrelated industries merge. For
example, the purchase of Sterling Drug, a pharmaceutical firm, by Eastman Kodak,
best-known for its films and cameras, represents a conglomerate merger because
the two companies are of different industries.

Blooms: Remember
Learning Objective: 04-04 Define and debate the advantages and disadvantages of mergers; acquisitions; and
leveraged buyouts.
Topic: Trends in Business Ownership: Mergers and Acquisitions
74.
Most tender offers are considered hostile.

FALSE
Most tender offers are "friendly," with both groups agreeing to the proposed deal,
but some are "hostile," when the second company does not want to be taken over.

Blooms: Remember
leveraged buyouts.
75.
When firms that make and sell similar products to the same customers merge, it is
known as a horizontal merger.
TRUE
A horizontal merger occurs when firms that make and sell similar products to the
same customers merge.

Blooms: Remember
leveraged buyouts.
4-52
76.
A merger occurs when one company buys another by buying its stock.
FALSE
A merger occurs when two companies, usually corporations, combine to form
another company.

Blooms: Remember
leveraged buyouts.
77.
Shark repellant is a method of thwarting a corporate takeover in which

management requires a large majority of stockholders to approve the takeover.
TRUE
To head off a hostile takeover attempt, the company's managers may use a shark
repellent, in which management requires a large majority of stockholders to
approve the takeover.

Blooms: Remember
leveraged buyouts.
78.
A leveraged buyout is an organization composed of small businesses that have

banded together to reap the benefits of belonging to a larger organization.
FALSE
A leveraged buyout (LBO) occurs when a group of investors borrows money from
banks and other institutions to acquire a company or a division of one, using the
assets of the purchased company to guarantee repayment of the loans.

Blooms: Remember
leveraged buyouts.
4-53
79.
The government usually will scrutinize high-profile mergers and acquisitions to

ensure that they are not creating monopolies.
TRUE
Horizontal mergers that reduce the number of corporations competing within an
industry are of particular interest to federal regulators.

Blooms: Remember
leveraged buyouts.
80.
Companies of all sizes grow and improve profitability by
A.
B.
C.
D.
E.
choosing the right kind of organizational structure.

sticking to domestic markets.
not utilizing new technologies as they become available.
expanding their operations.
creating franchises.
Companies large and small achieve growth and improve profitability by expanding
their operations, often by developing and selling new products or selling current
products to new groups of customers in different geographic areas.

Blooms: Remember
leveraged buyouts.
4-54
81.
known as a
A.
B.
C.
D.
E.
horizontal merger.
vertical merger.
acquisition.
hostile takeover.
poison pill.
known as a horizontal merger; these are often subject to especially intense
scrutiny by federal regulators.

Blooms: Remember
leveraged buyouts.
82.
When a firm is facing a hostile takeover attempt, it may issue a poison pill, which
is
A.
when it fires its board of directors for incompetence.
B. when the firm allows stockholders to buy up shares of stock at lower than
market value.
C. when the executive suite quits en masse before a takeover.
D.
a term for plummeting stock values.
E. a letter that expresses dismay at the maneuver sent to the company
attempting the takeover.
A poison pill occurs when the firm allows stockholders to buy up shares of stock at
lower than market value in order to fend off a hostile takeover.

Blooms: Remember
leveraged buyouts.
4-55
83.
When two companies combine to form a new company, it is called a(n)
A.
B.
C.
D.
E.
merger.
acquisition.
tender offer.
leveraged buyout.
white knight.
A merger occurs when two companies, usually corporations, combine to form a

new company.

Blooms: Remember
leveraged buyouts.
84.
When a company offers to buy some or all of another company's stock at a

premium price, it is a(n)
A.
B.
C.
D.
E.
acquisition.
leveraged buyout.
merger.
hostile offer.
tender offer.
A tender offer is when a company offers to buy some or all of another company's
stock at a premium price.

Blooms: Remember
leveraged buyouts.
4-56
85.
When a group of investors borrows money to buy a company or division, using the
company's assets to guarantee the loan, it is called a(n)
A.
B.
C.
D.
E.
acquisition.
merger.
leveraged buyout.
tender offer.
poison pill.
A leveraged buyout (LBO) is a group of investors that borrows money from banks
and other institutions to acquire a company (or a division of one) using the assets
of the purchased company to guarantee repayment of the loan.

Blooms: Remember
leveraged buyouts.
86.
Big City Financial is attempting to avoid a hostile takeover by a corporate raider by

allowing stockholders to buy more shares of stock at prices lower than current
market value. Which of the following methods is being used to avoid the
takeover?
A.
B.
C.
D.
E.
A leveraged buyout
A tender offer
A white knight
A poison pill
Shark repellant
A poison pill allows stockholders to buy more shares of stock at prices lower than
current market value to deter a hostile takeover.

Blooms: Understand
leveraged buyouts.
4-57
87.
When companies operating at different, but related, levels of an industry merge, it

is known as a(n)
A.
B.
C.
D.
E.
vertical merger.
horizontal merger.
acquisition.
leveraged buyout.
diagonal merger.
Vertical mergers usually occur when one corporation merges with one of its
customers or suppliers.

Blooms: Remember
leveraged buyouts.
88.
When discussing corporations, what is a white knight?
A.
A mythical hero in fairy tales
B. An attempt to fend off a hostile takeover by selling stock at below market value
C. An attempt to fend off a hostile takeover by requiring the deal be approved by a
large majority of shareholders
D. A more acceptable firm that is willing to acquire the firm threatened by hostile
takeover
E. A group of investors that has borrowed money to acquire a firm
A white knight is a firm that is willing to acquire a threatened firm in order to save
it from hostile takeover.

Blooms: Remember
leveraged buyouts.
Essay Questions
4-58
89.
What is a vertical merger and why would a firm attempt one? What are the
benefits?
When companies operating at different but related levels of an industry merge, it

is known as a vertical merger. In many instances, a vertical merger results when
one corporation merges with one of its customers or suppliers. Advantages might
be to ensure a ready supply of raw materials or to help smooth out distribution
issues.

Blooms: Understand
leveraged buyouts.
90.
What is a leveraged buyout? What are some of the advantages of mergers and
acquisitions?
A leveraged buyout is a purchase in which a group of investors borrows money

from banks and other institutions to acquire a company (or a division of one),
using the assets of the purchased company to guarantee repayment of the loan.
Advantages of mergers and acquisitions include boosting stock prices and market
values to the benefit of stockholders, company's enhanced ability to meet foreign
competition, and increased efficiency of the firm.

Blooms: Understand
leveraged buyouts.
4-59
91.
Bryan thinks their plant resale company should be a corporation because
A.
B.
C.
D.
E.
it is cheaper.
all good businesses are corporations.
they would have limited liability and seem larger.
the other forms of corporation are not valid in their case.
Bryan does not think the company should be a corporation.
Bryan thinks that organizing as a corporation would be best because it gives them
the image of being a larger corporation, as well as limited liability.
AACSB: Analytic
Blooms: Apply
Learning Objective: 04-05 Propose an appropriate organizational form for a startup business.
Topic: Solve the Dilemma
92.
Thomas thinks that organizing as a partnership would be best because
A.
it is the most complicated to form.
B. they are a small company and do not need to be a corporation.
C.
it gives them limited liability.
D. it would allow them to rely on their own financial resources and talents.
E. they would have an easier time selling the business later.
Thomas thinks that the partnership would be easier to start and would allow them
to best utilize their talents and financial resources.
AACSB: Analytic
Blooms: Apply
Essay Questions
4-60
93.
What are some of the advantages and disadvantages of Thomas and Bryan
forming a corporation?
The major advantages of Thomas and Bryan forming a corporation are the limited
liability provided by this form of organization and the ease of the potential for
future expansion. External financing is readily available for corporations.
The main disadvantages of forming a corporation are the double taxation imposed
on Bryan and Thomas, the cost of creating the corporation, and the expenses
associated with the procedures involved in the disclosure of information.
AACSB: Analytic
Blooms: Apply
94.
What are the advantages and disadvantages of their forming a partnership?
Some of the advantages of partnerships to be considered are the ease of the

organization and decision making between the two partners, the better credit
rating of partnerships, and the lower number of regulatory controls that apply to
partnerships compared to corporations. Unlimited liability, business responsibility,
and limited sources of funds are some of the drawbacks of partnerships that
should be assessed by Thomas and Bryan.
AACSB: Analytic
Blooms: Apply
95.
Which organizational form do you think would be best for Thomas and Bryan's
company and why?
Students' answers will vary because there is no absolute answer. The final decision
will depend on the past business experience of Thomas and Bryan, their degree of
financial stability, and their expectations in terms of growth. However they
respond, students should defend their answers.
AACSB: Analytic
Blooms: Analyze
4-61
4-62

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Chapter 04

Options for Organizing Business

True / False Questions

2. Most sole proprietorships focus on manufacturing.

3. Lack of control is a disadvantage of sole proprietorships.

4. Sole proprietorships have the least degree of secrecy.

8. Sole proprietorships typically employ fewer than 50 people.

Multiple Choice Questions

9. Sole proprietorships are taxed

the average corporation is small, but earns little income.

13. All of the following are advantages of a sole proprietorship except

14. Which of the following is an advantage of a sole proprietorship?

Limited sources of funds

16. The income earned by sole proprietorships is

19. Which characteristic of a sole proprietorship can be considered both an advantage

21. A sole proprietorship is a popular form of business because

it is heavily regulated by the government.

24. What are sole proprietorships? Provide an example.

True / False Questions

25. A limited partnership involves a complete sharing in the management of a business.

28. All states require partnerships to have articles of partnership.

29. Partnerships have fewer regulatory controls than corporations.

31. In a partnership, all partners are equally liable.

Multiple Choice Questions

32. Which of the following is not a disadvantage of forming a partnership?

All partners are responsible for all other partners

33. When are limited partnerships generally used?

A. When one partner has more money than the others

partnerships are subject to unlimited liability.

a statement of what each partner contributes.

39. It is easier to raise funds in a partnership than in a sole proprietorship because

more people means greater earning power and credit.

41. Which of the following is an advantage of a partnership?

42. Which of the following is a disadvantage of a partnership?

Difficulty of selling ownership

43. According to the Internal Revenue Service,

A. profitable partnerships pay taxes before distributing profits.

True / False Questions

48. S Corporations are more flexible than traditional "C corporations."

49. Corporations cannot be sued.

50. In most states, corporations must have "corporation," "incorporated," or "limited" in

Multiple Choice Questions

55. Corporations distribute profits to their owners in the form of

57. A private corporation is one that

A. is owned by only a few people and not traded in public markets.

first offer right.

61. Common stockholders do not have the right to

vote for the board of directors.

62. An important advantage of a corporation is its

67. A written authorization assigning a stockholder's voting privilege to another is a

68. Joint ventures are popular in situations that call for

69. All of the following are advantages of a corporation except

72. How do preferred stockholders differ from the common stockholders of a

True / False Questions

74. Most tender offers are considered hostile.

77. Shark repellant is a method of thwarting a corporate takeover in which management

78. A leveraged buyout is an organization composed of small businesses that have

Multiple Choice Questions

80. Companies of all sizes grow and improve profitability by

choosing the right kind of organizational structure.

A. when it fires its board of directors for incompetence.

88. When discussing corporations, what is a white knight?

Multiple Choice Questions