Wealth Creation and Sustainable Growth Quiz

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Questions and Answers

What are the three types of business ownerships discussed in the text?

Sole proprietorship, partnerships, corporations

What is the main advantage of a corporation in terms of liability?

Limited liability - the owner is not personally liable if the business goes under.

What is the main disadvantage of a corporation in terms of taxation?

Double taxation - the corporation pays taxes on its profits, and shareholders pay taxes on dividends.

Explain the concept of preferred shares in a corporation.

<p>Preferred shares do not have voting rights but have priority in receiving dividends and assets in case of liquidation.</p> Signup and view all the answers

What does it mean for a share to be 'callable'?

<p>Callable shares can be bought back by the company at a fixed rate, at the company's discretion.</p> Signup and view all the answers

What is the main advantage of franchising a business?

<p>Known brand, easier startup, support from the franchise, proven business model, savings through volume purchases</p> Signup and view all the answers

What is one of the disadvantages of franchising?

<p>Lack of full control over reputation, limited creativity options, initial franchise fees, future royalties, tight control by the franchisor</p> Signup and view all the answers

What key information should be included in a business plan?

<p>Customer profile, revenue sources, marketing strategy, cost structure</p> Signup and view all the answers

What is the Diamond of sustainable growth in business?

<p>The factors required to create sustainable economies and growth.</p> Signup and view all the answers

What is the main advantage of a sole proprietorship?

<p>The owner takes all the profits.</p> Signup and view all the answers

What is the main disadvantage of a partnership?

<p>Shared profits and liabilities among partners.</p> Signup and view all the answers

What advantage do common shareholders have in a corporation?

<p>They have the potential for high returns if the company succeeds.</p> Signup and view all the answers

What is the purpose of a partnership agreement?

<p>To outline the responsibilities, profit-sharing, and decision-making processes between partners.</p> Signup and view all the answers

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