Problem $1(3$ marks$)$

What form of business organization makes most sense for a large and growing firm. Briefly

explain.

Problem $2(5$ marks$)$

In $2021(3$ years ago$)$ years ago, you paid $$400,000$ for $10\%$ of the shares of Charleston

Corporation. The corporation has $9$ other shareholders each with a $10\%$ equity position in the

company. The corporation has grown over the past $3$ years and your shares are now worth

$$700,000.$ The corporation recently issued bonds in the amount of $$6,000,000$ to fund an

acquisition. The acquisition was a disaster, and the company is now unable to meet its interest

commitments and is on the verge of bankruptcy. There are no other debts.

a$)$ As a $10\%$ shareholder, what is the maximum potential loss you could have if the company

declares bankruptcy? $(2$ marks$)$

b$)$ Explain how your answer would change if the company was a general partnership

instead? $(3$ marks$)$

Problem $3(4$ marks$)$

Should the goal of a corporation be to maximize a firm's accounting profit? Briefly explain why

or why not.

Problem $4(3$ marks$)$

What is an aoonry rolatinnchin in a rornnratinn? Who is tho nrincinal? Whe is the aoont?