Chapter 6

debt, cash, & stock

A company can acquire or merge with another company by paying _______.

value-added tax (VAT)

A(n) ____ is an imbedded excise tax, assessed during the creation of the product, but ultimately paid by the customer.

sales tax

A(n) _____ is an excise tax on the purchase sale, and consumption of a product.

Stop Swap

A(n) _____ is when a company buys another company with stock.

Liability

A(n) ______ is defined as an obligation of an individual or organization that comes about because of a transaction or event.

stock swap

In 2004 the banking firm of J P Morgan Chase purchased the banking firm of Bank One Corp. J P Morgan Chase gave each stockholder of Bank One Corp. 1.32 shares of J P Morgan Chase stock in exchange for each share of Bank One Corp. This was a(n) _______.

leveraged buyout (LBO)

In 2005, a group of private investors bought Toys "R" Us by borrowing billions of dollars and using that cash to buy Toys "R" Us' stock. These private investors used the ____ strategy.

among the partners in accordance to the partnership agreement

In a general partnership, net income is divided ______.

when the enterprise or transaction is complete in a joint venture, the joint venture is dissolved

Joint ventures are different from partnerships because _______.

Both Stockholders and Shareholders

Owners of a corporation are called _____.

$210

Russell buys a melotica for $200 in cash. The sales tax rate is 5%. What dollar amount does Russell give up in exchange for the melotica?

vertical integration

Sears, a retail store, buying Lands End, a supplier of clothing, is an example of _______.

an initial fee and/or a percentage of its sales

The franchisee often pays _______ to the franchisor.

Corporations

The largest businesses in the United States are typically __________.

partnership and sole proprietorship

The law does not recognize the difference between the business and the owner(s) of a(n) _______.

the members of the Board of Directors

The owners of a corporation empower ______ to act as their agents.

partnership agreement

The rights and responsibilities of each partner are typically stated in a legal document called a _______.

average tax rate

The total tax divided by the total taxable income is _______.

majority stockholder

When the purchasing company owns enough of the purchased company to control the purchased company, the purchasing company is called the _____

Inflation

Which of the following is not a form of government taxes?

University Students

Which of the following is not an example of intellectual property?

There can only be one type or class of stockholders

Which of the following is not true of a Limited Liability Corporation (LLC)?

It has a limited liability

Which of the following is not true of a sole proprietorship?

$10,000

Zach owns real estate valued at $1,000,000. The property tax rate is 1%. How much does Zach pay the government for property taxes?

A joint venture

_____ occurs when two or more businesses enter into a legal relationship similar to a partnership.