1. The Corporation

2. Of the 100 largest economies in the world….
The Corporation
Of the 100 largest economies in the world….

3. About half of these would be that of corporations……
The Corporation

4. The Corporation

5. The Corporation

6. The Corporation

7. Due some key advantages, this business organization has catapulted into a dominant position in the United States.

8. One huge advantage-limited liability

9. Your personal assets are not at stake if a corporation defaults on its debts.

10. Capital & Money

11. Companies can attract capital quickly

12. But how do they do that?

13. Capital is raised by the sale of stocks & bonds…

14. Bonds are promises to repay a loan- usually at a set rate of interest.

15. Stocks are shares of ownership..

16. Known as “equity investments”

17. Sometimes these are referred to as Securities

18. Common and Preferred

19. Common- Owners share in success when company prospers

20. Owners at risk if company falters
Very volatile- higher risk

21. Preferred

22. Dividend payments have a priority over common stock holder rights

23. Dividends will not significantly go up if the company prospers

24. “Blue Chip”

25. Which of these is considered a safer investment?

26. Why would the average person be interested in investing?

27. “Ease of Sale” is the important concept

28. Regular folks can own part of a business-

29. Hope to share in monetary rewards….

30. & not worry about actively managing the business!

31. If you no longer wish to speculate, you can sell your securities

32. Corporations can run into problems…

33. Principal-agent problem

34. Conflict of interest may arise

35. Principals-stockholders

36. Agents-managers

37. Profits & stock prices may not be maximized for owners.

38. Corporations have avoided personal responsibility for questionable business activities

39. Has this been a problem for business our our society?

40. IBM & Nazi Germany