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| A law passed by Congress that requires the CEO and CFO to certify that their firm's financial statements are accurate. |
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| An unincorporated business owned by one individual. |
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| An unincorporated business owned by two or more persons. |
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| A legal entity created by a state, separate and distinct from its owners and managers, having unlimited life, easy transferability of ownership, and limited liability. |
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| A special designation that allows small businesses that meet qualifications to be taxed as if they were a proprietorship or a partnership rather than a corporation. |
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| Limited Liability Company (LLC) |
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Definition
| A relatively new type of organization that is a hybrid between a partnership and a corporation. |
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| Limited Liability Partnership (LLP) |
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Definition
| Similar to an LLC but used for professional firms in the fields of accounting, law, and architecture. It has limited liability like corporations but is taxed like partnerships. |
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Term
| Shareholder Wealth Maximization |
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Definition
| The primary goal for managers of publicly owned companies implies that decisions should be made to maximize the long-run value of the firm's common stock. |
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| An estimate of a stock's "true" value based on accurate risk and return data. The intrinsic value can be estimated but not measured precisely. |
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| The stock value based on perceived but possibly incorrect information as seen by the marginal investor. |
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| An investor whose views determine the actual stock price. |
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| The situation in which the actual market price equals the intrinsic value, so investors are indifferent between buying or selling a stock. |
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| A company's attitude and conduct toward its employees, customers, community, and stockholders. |
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| An individual who targets a corporation for takeover because it is undervalued. |
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Definition
| The acquisition of a company over the opposition of its management. |
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