COMM 308 Chapter Notes - Chapter 2: Legal Personality, Sole Proprietorship, Unemployment Benefits
3 Nov 2018
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If employing persons, the owner must obtain a employer number, deduct and remit income taxes as well as make employer contributions to cpp and employment. Corporations: nature of the business, a separate legal entity under the law. 2. 2 the goals of the corporation: enhancing shareholder value, balancing gain with risk. What three factors affect stock prices: amount of cash flows expected by shareholders, timing of the cash flows stream, risk of the cash flows. How to achieve the objective: spending money, raising money, net working capital decisions. 2. 3 the role of management and agency issues. Agency relationship: managers are working on behalf of the shareholders. Major types: direct costs, arise because suboptimal decisions are made by managers when they act in a manner that is not in the best interests of their company"s shareholders, indirect costs. Incurred in an attempt to avoid direct agency costs.
