From a legal organization perspective, "unincorporated" means and is inferior to being "incorporated" from a business finance perspective because an unincorporated business had been established as a separate legal person, but has lost its charter because it did not pay its taxes; the company may not be able to obtain enough business credit. the owner-operator or partners have not established their business as a separate legal person; being unincorporated exposes the owners to unnecessary risks and unnecessary potential costs. the owner-operator or partners have lost the corporate charter because the company was sold to another party; their income taxes will be unnecessarily high. the owner-operator or partners have established their business as a separate legal person; it hedges unnecessary risks and unnecessary potential costs. Management and common stockholders can create conflicts with the lenders to a business by_: one way lenders can protect their interests when loaning money to a business is to _ declaring bankruptcy to avoid paying principal and interest payments; require the borrowing company to make a commitment to never declare bankruptcy. borrowing under a commercial bank line of credit versus issuing long-term bonds; require management to pledge personal assets as collateral borrowing more money from additional lenders and by investing in higher-risk business projects which are not necessary for a company, ensure certain restrictive covenants are contained in all debt-related loan agreements and bond indentures. As described by the textbook and instructor, the "Agency Problem" is _; two ways to reduce/eliminate this problem as described in the textbook and/or the instructor are equity capital providers expecting management to produce financial results by violating generally accepted ethical principles; management can find employment with another company, or management can start their own company(ies) to compete with the company. lenders failing to provide adequate amounts of funding as previously promised; stop making service payments, and obtain loans from competing financial institutions. management failing to keep common stockholders happy: management can be required to work for zero compensation until they please the common stockholders, and management can be required to purchase substantial amounts of common stock with their own money. management failure to achieve the shareholder wealth maximization goal; require management to purchase substantial amounts of common stock with their own money, and always consider conditions under which a sale of the company to another company might be feasible. As described in the textbook: business ethics means ___; the instructor's information concerning ethics included standards of conduct as developed by each person individually/subjectively, and how an individual conducts him/herself at the workplace; international legal standards as developed by the United Nations. the idea that businesses are supposed to adhere to all laws and regulations normally unless they prevent management from producing a fair investment return to common stockholders; the personal consciences all individuals possess to some degree. a company's attitude and conduct towards its employees, customers, community, and stockholders; references to established personal, family, corporate, industry and legal standards of behavior. official corporate codes of conduct about which all employees and corporate officers are subject; the Ten Commandments. When asked, "What is the primary financial goal for a company?" many reasonable persons might say, "To make as much money as possible", which could be interpreted "Maximize Profit". How did the instructor describe the primary financial goal for a company and why Maximizing Profit is not a strong enough goal? (Select all the answers that are correct) Maximize the Net Earnings Available to Common Stockholders as defined by General Accepted Accounting Principles. Maximizing Profit usually addresses only profit as defined by Generally Accepted Accounting Standards, and it does not take a company's overall risk profile into consideration. Maximize sales growth, minimize expenses, and maximize earnings per share as defined by Generally Accepted Accounting Principles; Maximizing Profit only does not manage the risk profile of a company or its cost of capital. Management should produce enough Free Cash Flow profitability to cover the company's Weighted Average Cost of Capital, and should aim to produce more than that to increase the probability of producing enough Free Cash Flow to provide the common stockholders a fair return.. From a legal organization perspective, "unincorporated" means and is inferior to being "incorporated" from a business finance perspective because an unincorporated business had been established as a separate legal person, but has lost its charter because it did not pay its taxes; the company may not be able to obtain enough business credit. the owner-operator or partners have not established their business as a separate legal person; being unincorporated exposes the owners to unnecessary risks and unnecessary potential costs. the owner-operator or partners have lost the corporate charter because the company was sold to another party; their income taxes will be unnecessarily high. the owner-operator or partners have established their business as a separate legal person; it hedges unnecessary risks and unnecessary potential costs. Management and common stockholders can create conflicts with the lenders to a business by_: one way lenders can protect their interests when loaning money to a business is to _ declaring bankruptcy to avoid paying principal and interest payments; require the borrowing company to make a commitment to never declare bankruptcy. borrowing under a commercial bank line of credit versus issuing long-term bonds; require management to pledge personal assets as collateral borrowing more money from additional lenders and by investing in higher-risk business projects which are not necessary for a company, ensure certain restrictive covenants are contained in all debt-related loan agreements and bond indentures. As described by the textbook and instructor, the "Agency Problem" is _; two ways to reduce/eliminate this problem as described in the textbook and/or the instructor are equity capital providers expecting management to produce financial results by violating generally accepted ethical principles; management can find employment with another company, or management can start their own company(ies) to compete with the company. lenders failing to provide adequate amounts of funding as previously promised; stop making service payments, and obtain loans from competing financial institutions. management failing to keep common stockholders happy: management can be required to work for zero compensation until they please the common stockholders, and management can be required to purchase substantial amounts of common stock with their own money. management failure to achieve the shareholder wealth maximization goal; require management to purchase substantial amounts of common stock with their own money, and always consider conditions under which a sale of the company to another company might be feasible. As described in the textbook: business ethics means ___; the instructor's information concerning ethics included standards of conduct as developed by each person individually/subjectively, and how an individual conducts him/herself at the workplace; international legal standards as developed by the United Nations. the idea that businesses are supposed to adhere to all laws and regulations normally unless they prevent management from producing a fair investment return to common stockholders; the personal consciences all individuals possess to some degree. a company's attitude and conduct towards its employees, customers, community, and stockholders; references to established personal, family, corporate, industry and legal standards of behavior. official corporate codes of conduct about which all employees and corporate officers are subject; the Ten Commandments. When asked, "What is the primary financial goal for a company?" many reasonable persons might say, "To make as much money as possible", which could be interpreted "Maximize Profit". How did the instructor describe the primary financial goal for a company and why Maximizing Profit is not a strong enough goal? (Select all the answers that are correct) Maximize the Net Earnings Available to Common Stockholders as defined by General Accepted Accounting Principles. Maximizing Profit usually addresses only profit as defined by Generally Accepted Accounting Standards, and it does not take a company's overall risk profile into consideration. Maximize sales growth, minimize expenses, and maximize earnings per share as defined by Generally Accepted Accounting Principles; Maximizing Profit only does not manage the risk profile of a company or its cost of capital. Management should produce enough Free Cash Flow profitability to cover the company's Weighted Average Cost of Capital, and should aim to produce more than that to increase the probability of producing enough Free Cash Flow to provide the common stockholders a fair return