1. Bell Ringer – 3/10/08 1. What is a corporation? 2. Why do big businesses, such as a corporation, require a structure of employment positions? 3. How are stock and shares related?

2. Corporate Bond Corp. Bond – a certificate issued by a corporation in exchange for money borrowed from an investor Bondholder owns no part of company, company is in debt to bondholder Bondholder is repaid the principal (actual amount of $ borrowed) + interest (extra percent of loan paid by company)

3. Advantages of Corporations For Stockholders Limited liability (can’t lose more $$ than invested) Flexibility (shares can be sold) For Corporations Limited liability (investors’ $$) Owners not involved in daily operations; specialists for each task Longevity

4. Disadvantages of Corporations Corporate charter can be expensive and difficult (attorney an state fees several thousand dollars) Tough government regulation Slow process of decision making – manager debates, extensive study of issues by specialists Heavy taxes