Econ 8.3 – Flashcards
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The federal government issues a company's certificate of incorporation:
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false
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What is a certificate of incorporation?:
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A license to form a corporation issued by the state government
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If you buy stocks, you own part of a corporation.:
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true
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Privately held corporations are also closely held corporations.:
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true
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Dividends represent a portion of corporate profits:
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true
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What defines a corporation?:
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A business owned by individual stockholders
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What does the limited liability of the owners of stock in a corporation mean?:
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The stockholders of a corporation can lose only what they have invested in the corporation
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A conglomerate merges more than three companies making unrelated products.:
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true
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Stockholders must pay a capital gains tax whenever they sell their shares:
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false
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Publicly held corporations sell stocks to the Securities and Exchange Commission.
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false
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Corporate bonds pay dividends.:
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false
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What percentage of the net income earned in the United States is generated by corporations?:
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70%
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Multinational corporations usually headquarter in several countries:
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false
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What is the term for the joining of two or more firms involved in different stages of producing the same good or service?:
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vertical merger
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Companies in the same business might form vertical mergers:
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false
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Corporations have a legal identity:
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true
