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14 Cards in this Set
- Front
- Back
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Sole Proprietorship Advantange |
Easy Formation |
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Sole Proprietorship Disadvantage |
Unlimited liability, difficulty raising funds, permanence of the business |
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Corporations |
Owners not liable |
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Corporation Advantage |
Limited liability, permanency,flexibility |
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Corporation Disadvantage |
High cost, longer process to establish, double taxation |
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Corporate Taxes |
The corporation pays taxes on its profits, and then when the remaining profits are given to shareholders, they must pay their own personal income on these taxes |
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C Corp |
Pay taxes twice |
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S Corp |
100 or less shareholders, profits given based on shares |
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The financial manager: |
Makes investment decisions, financing decisions, manages cash flow from operating activities |
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Primary goal of financial manager: |
to maximize wealth of shareholders |
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Physical Stock Market |
•AuctionMarkets -- Trading process:•(1) investor places an order with a brokeragefirm •(2)broker sends the order to the floor (computer or broker on the floor)•(3)broker (or floor broker) sends the order to the market maker•(4)market maker crosses the trade if possible, or matches using his own inventory:u |
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Over the counter stock market |
•Collectionof dealers or market makers connected by computer networks and telephones |
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DealerMarket |
•security dealers buy and sell at theirown accounts, differently than an auction market |
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Perpetuity |
•isa stream of equalcash flows that occur at regularintervals and last forever. |
