How does the principle of limited liability make a corporation well suited to raising large amounts of capital?
A) information is publically disclosed regarding a corporation's finances
B) a corporation's investors are protected against limited losses
C) a corporation is subject to greater outside scrutiny
D) investors are protected against unlimited losses

Question

Quizplus · Accepted Answer

The principle of limited liability means that investors in a corporation can only lose the amount they have invested, protecting them from unlimited losses. This protection encourages more people to invest, making it easier for corporations to raise large amounts of capital.

How Does the Principle of Limited Liability Make a Corporation