What type of business is most likely to obtain large amounts of resources by issuing share?

Question

BlackTom AI · Accepted Answer

Question restatement: What type of business is most likely to obtain large amounts of resources by issuing share?
Options analyzed:
- Proprietorship: This structure is typically funded by a single owner who uses personal funds or loans; it generally cannot issue shares to the public, and thus has limited ability to raise large resources through share issuance.
- Company: A company, especially a corporation, can issue shares to investors to raise substantial capital. This aligns with the concept of raising large resources by selling equity.
- None of the options given.: This would be chosen only if none of the listed business types could issue shares to obtain resources, which contradicts the standard understanding that corporations issue shares.
- Partnership: A partnership is usually funded by the partners’ contributions and may raise capital through additional partner contributions or loans, but it does not issue shares to the public and is not structured to raise large resources via share issuance in the same way a company does.

Reasoning about intended concept: The core idea is that issuing shares is a hallmark of capital-raising through equity, which is characteristic of companies (corporations) rather than sole proprietorships or partnerships. Proponents of corporate finance emphasize equity financing through stock issuance as a primary method for accumulating large amounts of capital.

Why Option 2 fits best: Since a Company (corporation) has the formal mechanism to issue shares and attract investment from multiple shareholders, it is the type of business most associated with raising substantial resources via share issuance.

Why the others are not correct: Proprietorship lacks the ability to issue shares and relies on personal funds or debt; Partnership typically relies on partner contributions and debt rather than issuing shares; None of the options given is not accurate because the company option correctly describes the common mechanism for large-scale equity financing.

BACC012 Week 8: Practice Quiz

What type of business is most likely to obtain large amounts of resources by issuing share?

View Explanation

Log in for full answers

Similar Questions

Which form of business would be the best choice if it were necessary to raise large amounts of capital?

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler