Vocabulary
What is stock?
Stock is a share of ownership in a corporation.
Disadvantages of corporations.
1- Start up Cost and Effort
2- Heavy Regulations
3- Double Taxation
4- Loss of Controls
What is a horizontal merger?
A horizontal merger is the combining of two companies that produce the same product or similar products.
What is Corporation?
A corporation is a business owned by stockholders, who own the rights to the company's profits but face limited liability for the company's debts and losses.
Advantages of Corporation
1- Access to Resources
2- Professional Managers
3- Limited Liability
4- Unlimited Life
What is a vertical merger?
A vertical merger is the combining of companies involved in different steps of producing or marketing a product.
What is a dividend?
A dividend is a part of a corporation's profit that is paid out to stockholders.
What does unlimited life mean?
Unlimited life means that a corporation continues to exist even after the owner dies, leaves the business, or transfers his or her ownership.
What is a conglomerate?
A conglomerate is a business composed of several companies, each one producing unrelated goods or services.
What is a public company?
A public company issues stock that can be publicly traded.
What is Limited Liability?
Limited Liability means that a business owner's liability for debts and losses of the business is limited.
What is a private company?
A private company controls who can buy or sell its stock.
What is a bond?
A bond is a contract issued by a corporation that promises to repay borrowed money, plus interest, on a fixed schedule.