QUESTION 7

Under the corporate form of business organisation:

1. shareholders wishing to sell their company's shares must get the approval of other shareholders
2. a shareholder is personally liable for the debts of the company
3. shareholders acts can bind the company even though the shareholders have not been appointed as agents of the company
4. ownership rights are easily transferred between owners

QUESTION 8

Shareholders choose to invest in preferred shares because:

1. preferred shares can always be converted into ordinary shares at the shareholder's option
2. The preferred dividend distributions are generally increased each year
3. dividends are distributed to preferred shareholders before ordinary shareholders
4. preferred shares include the right to participate in management decisions through voting privileges