To maximize the value of a business,a firm needs access to capital and to minimize risk for investors.Given these guidelines,which business form should maximize value for a firm?

Question

Quizplus · Accepted Answer

A corporation is the best choice to maximize the value of a business as it allows for the easiest access to capital through the sale of stocks and bonds. Additionally, the limited liability of a corporation minimizes risk for investors. Sole proprietorships and partnerships do not offer the same level of access to capital and often have unlimited personal liability, which increases risk for investors. Limited partnerships may offer limited liability for some partners, but may also have restrictions on involvement and decision-making power, which could limit the potential for maximizing value.

To Maximize the Value of a Business,a Firm Needs Access