1. Anna Claire and Baker are establishing a new restaurant and discussing whether to organize as a partnership or a corporation. What are some of the most important characteristics of these two types of organizations that they should weigh in making the decision?
2. Anna Claire and Baker are considering organizing as a subchapter S corporation. What are the advantages and disadvantages they should consider?
3. Anna Claire and Baker are considering whether to issue preferred stock or to borrow funds on a long-term basis for additional cash for the corporation. Suggest some factors they should consider. How can they make the preferred stock more attractive to investors?
4. A group of individuals is planning to form a corporation. Explain in general terms the usual steps necessary to do this.
5. Why should the management of a corporation be concerned about the realistic valuation of assets transferred to the firm?