Disadvantage of the corporate form of organisation

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-You just won $150,000 in the state lottery. Lottery rules do not allow a lumpsum payment. Instead, the lottery will pay you $5,000 per year for the next 10 years, followed by payments of $10,000 per year for the next ten years. How much are your winnings actually worth? The appropriate interest rate is 8% per year.

-Say you own an asset that had a total return last year of 15%. If the inflation rate last year was 2.5%, what was your real return?

-Who owns a corporation? Describe the process whereby the owners control the firm's management. What is the main reason that an agency relationship exists in the corporate form of organisation? In this context, what kinds of problems can arise?

-What is the primary disadvantage of the corporate form of organisation? Name at least two of the advantages of corporate organisation.

Reference no: EM132692268

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