Why do businesses incorporate, and why do investors buy stocks?
What will be an ideal response?
Businesses seek limited liability to protect the personal assets of the company owners from lawsuits. In addition, corporations, such as Google, can raise millions of dollars in a single day from selling stock shares for the first time. Investors buy stocks because of expectations that the corporation will earn profits in the future. As a stock owner, you may earn dividends (a payment per share of profit from the company) or earn capital gains (you sell the stock for a higher price than you paid for it).
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Why does the government intervene in the market for research, especially medical research?
What will be an ideal response?
Since most banks have positive gaps and negative duration gaps, an increase in market interest rates will
A) increase bank profits and increase bank capital. B) increase bank profits and decrease bank capital. C) decrease bank profits and increase bank capital. D) decrease bank profits and decrease bank capital.