QUESTION Briefly describe two ways to launch a hostile takeover. What will be an ideal response? ANSWER Answer: A hostile takeover can be launched by a tender offer or by a proxy fight. A tender offer occurs when an outsider seeking to take over a company directly contacts the company’s shareholders and offers to […]
Date: September 3rd, 2020
QUESTION What could happen to the employees involved in an employee buyout if the company performed very poorly? What will be an ideal response? ANSWER Answer: Employees who had borrowed money against their own assets to purchase the company could lose the assets they borrowed against, such as their houses, cars, savings, or pension […]
Date: September 3rd, 2020
QUESTION What is a limited partnership? What will be an ideal response? ANSWER Answer: A limited partnership has at least one general partner plus other limited partners who invest in the company but do not have any say in the management of the company or any liability in the company. Explanation: A limited partnership […]
Date: September 3rd, 2020
QUESTION When entering into a partnership, it is a good idea to get a lawyer to draw up a document called articles of partnership. Why? What will be an ideal response? ANSWER Answer: Articles of partnership refers to a legal document that defines the role of each partner in the business, states how much […]
Date: September 3rd, 2020
QUESTION What are the three drawbacks of being a partnership? What will be an ideal response? ANSWER Answer: (1) Experience personality conflicts or other disagreements among partners. (2) Have unlimited liability. (3) Have difficulty ending or changing the partnership and can’t pass the business along. Explanation: The three drawbacks of being a partnership are: […]
Date: September 3rd, 2020
QUESTION Lucky’s Cupcakes, a sole proprietorship, and Mini Cakes, a general partnership, intend to merge. One partner from Mini Cakes is going to step down from handling day-to-day operations but is still going to contribute financial resources to the company. What kind of company will the merged company become? Explain. What will be an ideal […]
Date: September 3rd, 2020
QUESTION Couples entering into a business partnership are advised to discuss their goals and to make big decisions together but to otherwise divide up the decision making according to expertise and to not second-guess each other. What are four other points of advice for couples who decide to enter into a business partnership? What will […]
Date: September 3rd, 2020
QUESTION What is a co-op, and what is its usual purpose? What will be an ideal response? ANSWER Answer: A cooperative is a corporation owned by its members who have pooled their resources for the benefit of all of them. Its purpose is to provide a service to its members rather than to make […]
Date: September 3rd, 2020
QUESTION Briefly describe the type of corporation favored by most big business. What will be an ideal response? ANSWER Answer: A C corporation can have any number of owners (shareholders), most of whom do not work for the company. The business faces two levels of taxation. Taxes are paid on profits at the corporate […]
Date: September 3rd, 2020
QUESTION Which is an example of a conglomerate merger? A) Frito-Lay merging with Pepsi B) Peter Pan Bus Company merging with Greyhound C) Chrysler merging with Ford D) Starbucks merging with Dunkin’ Donuts E) International Paper merging with Kraft Foods ANSWER Answer: E Explanation: E) A conglomerate merger is when two companies that are […]
Date: September 3rd, 2020
