What are the basic differences between a stock and a mutual insurance company?
What will be an ideal response?
The main difference between a stock and a mutual is that the policy holders of a mutual own the company. There is no capital stock in the mutual and policy holders participate in the good and bad performance of the company. Stock companies issue stock to raise capital. A policy holder does not have to be an owner (stockholder) of the company. Dividends from a mutual are not taxable, whereas stock dividends are.
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Ivan was interested in buying a 40 acre parcel of commercially zoned property offered for sale by Land Co. He thought he might build a professional office complex, but would not know for sure until he consulted with soil engineers and architects. To make certain that the property was not taken off the market or sold to another buyer while he was deciding, he gave Land Co. $15,000 to keep the offer open for 3 months. This is an example of a __________________
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A recent study conducted by Estelle Cosmetics Company showed that heavy users of Estelle's products comprise a small percentage of the market
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