This Question: 3 pts 5 of 28 (0 complete) Drake and Brian are opening a copy store. There are no competing copy stores in the area. They must decide how to organize the business. They anticipate profits of $250,000 the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow. They feel the corporate form of operation will be best for the long term. They seek your advice. Read the requirements Requirement 1. What is the main advantage they gain by selecting a corporate form of business now? By selecting the corporate form business now, Drake and Brian will O A. avoid the double taxation that affects partnerships and proprietorships. O B. benefit from the ability to exercise mutual agency within a corporation O C. be able to transfer ownership without affecting the continuity of the company. Requirement 2. Would you recommend they initially issue preferred or common stock? Why? You would recommend that Drake and Brian initially issue v stock because Requirement 3. If they decide to issue 55 par common stock and anticipate an initial market price of $25 per share, how many shares will they need to issue to raise $1,500,000? The number of shares to issue in order to raise $1,500,000 is Requirement 2. Would you recommend they initially issue preferred or common stock? Why? You would recommend that Drake and Brian initially issue stock because Requirement 3. If they decide to issue $5 par common sto n initial market price of $25 per share, how many shares will they need to issue to raise $1,50 common The number of shares to issue in order to raise $1,500,000 preferred Requirement 2. Would you recommend they initially issue preferred or common stock? Why? You would recommend that Drake and Brian initially issue v stock because Requirement 3. If they decide to issue $5 par common stock and anticipate an initial i e $1,500,000? a corporation can only issue a small amount of common stock The number of shares to issue in order to raise $1,500,000 is a share of common stock costs more than a share of preferred stock a share of preferred stock costs more than a share of common stock dividends generally must be paid on preferred stock