Which of the following statement is correct? Corporation face few regulation and

Question

Which of the following statement is correct? Corporation face few regulation and more favorable tax treatment than do sole proprietorships and partnerships. Managers who face the threat of hostile takeovers are less likely to pursue policies than maximize shareholders value compared to managers who do not face the threat of hostile takeovers. Bond covenants are an effective way to resolve conflicts between shareholders and managers. Because of their simplified organization, it is easier for sale proprietors and partnerships to raise large amounts of outside capital than it is for corporations. One advantage to forming a corporation is that the owners of the firm have limited liability. Which of the following statements is CORRECT? I he four most important financial statements provided in the annual report arc the balance sheet, income statement, cash budget, and the statement of stockholders' equity. The balance sheet gives us a picture of the line's financial position at a point in time. The income statement gives us a picture of the firm's financial position at a point in time. The statement of cash (lows tells us how much cash the firm must pay out in interest during the year. I he statement of cash needs tells us how much cash the firm will require during some future period, generally a month or a year. Other things held constant, which of the following actions would increase the amount of cash on a company's balance sheet? The company repurchases common stock. The company pays a dividend. The company issues new common stock. The company gives customers more time to pay their bills, The company purchases a new piece of equipment. Which of the following items is NQI normally considered lobe a current asset? Accounts receivable. Inventory. Bonds. Short-term, highly-liquid, marketable securities.

Explanation / Answer

3)

Shareholders are the owners of the corporation. They are also called residual owners. They are eligible to receive all the assets remained after paying liabilities but their liability is limited to the amount of unpaid share capital and uncalled share capital.

Hence correct option is (e)

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