Ch.1 Flashcards
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1
Q
Sarbanes Oxley Act
A
Federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes
2
Q
Proprietorship
A
- Owned my one individual
- Personally liable for all its debts and obligations
3
Q
Partnership
A
- Owned by two or more individuals
- Share profits and Liabilities
4
Q
Corporation
A
- Legal entity that is separate and distinct from its owners
- Limited liability to its shareholders
5
Q
S Corporation
A
- Form of corporation that meets specific Internal Revenue Code requirements
- Special tax status that avoids double taxation
6
Q
Limited Liability Partnership (LLP)
A
- Some or all partners have limited liabilities
- Partners are not responsible for the actions of other partners
7
Q
Limited Liability Company (LLC)
A
- Hybrid business
- Combines limited liability of a corporation with tax efficiencies
- Operational flexibility of a partnership
8
Q
Intrinsic Value
A
- Actual worth of company’s stock
- Determined through fundamental analysis without reference to its market value
9
Q
Market Price
A
- Current price at which an asset or service can be bought or sold at
10
Q
Marginal Investor
A
- Investor whose views determine the actual stock price because they are the last one to buy or sell at the current market price
11
Q
Equilibrium
A
- State in which market supply and demand balance each other out
- Resulting in stable prices
12
Q
Corporate Governance
A
- System by which company’s are directed and controlled
- Involving a board of directors to ensure accountability
13
Q
Corporate Raider
A
- Investor of a firm that buys a large stake in a company to gain control and force changes to increase shareholder value
14
Q
Hostile Takeover
A
- Acquisition in which the target company does not wish to be acquired by the buyer
15
Q
Stockholder Wealth Maximization
A
Management philosophy the focuses on maximizing the value of a company for its shareholders
