Module 12

Question 1

3 Forms of Business Entity?

Answer 1

Sole Proprietorship, Partnership and Corporation

Question 2

First Decision to incorporate?

Answer 2

Federal (CBCA) or Provincial (OBCA)

Question 3

2nd and 3rd Decision?

Answer 3

How much share capital to authorize and who are the directors

Question 4

4th and 5th Decision?

Answer 4

Name registration and finding underwriter

Question 5

1st Basic right of Common Shareholder?

Answer 5

Residual Ownership of Net Assets

Question 6

2nd Basic right of Common Shareholder?

Answer 6

One share, One vote

Question 7

3rd and 4th Basic right of Common Shareholder?

Answer 7

Primary rights and receive dividends

Question 8

Why are Preferred Shares Preferred?

Answer 8

Give up voting rights but have more security over investment

Question 9

Which is better for investors?

Answer 9

Risk vs Return

Question 10

How does firm view preferred shares?

Answer 10

Another form of debt, and hard to sell

Question 11

How do we issue shares for Non-Cash Assets?

Answer 11

Recorded in FMV

Question 12

How do we issue costs GAAP way?

Answer 12

Intangible Assets (Organization Costs) and Reduction of production

Question 13

What is a treasury share?

Answer 13

When a firm buys its own shares on open

market, CBCA makes illegal

Question 14

What is leverage?

Answer 14

Ability to use borrowed funds in business to generate higher return