Question

ANSWER MUST BE CLEAR TO READ! thanks!

Which of the following features characterizes a corporation? A corporation, unlike a person, cannot own property or borrow money in its own name. The liability of the corporate shareholders is limited to the value of the stock they own. Ownership of a corporation resides with one person who is responsible for all debts incurred by the business. Business structures in which ownership and management are separate, as with corporations, are subject to principal-agent problems. Which of the following may help reduce such problems and promote cost efficiency? Check all that apply. Threat of a takeover Loyal customers who will buy the firm's products unconditionally Profit-sharing agreements with managers Grade It Now Save & Continue Continue without saving

Answer 1

1. Ans: The liability of the corporate shareholders is limited to the value of the stock they own.

Explanation:

A corporation is a legal entity, which is a separate entity from its owners who are called stockholders. It can sue or be sued and it can continue to exist despite an owner's death.The liability of stockholders is limited to the amount each has invested in the corporation. So, corporation is a legal entity owned by stockholders whose liability is limited to the value of their stock ownership

Thus, 2nd option is correct

2. Ans:

• Threat of takeover
• Profit-sharing agreements with managers