Peter decides to open a large store that sells organic farm ...

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Peter decides to open a large store that sells organic farm produce, but he is not sure about how to obtain the funding he needs to get started. He calculates the start-up funding that he will need as 50,000. What type of funding would be appropriate for this type of business? What are the advantages and disadvantages of this type of funding?

Question 2

Amy owns 100 shares of General Electric preferred stock. She wants to attend the annual stockholder meeting to cast her vote on company issues. Based on your knowledge from school, you caution Amy that
 A) people with fewer than 1,000 shares of stock cannot vote.
  B) stockholders are not allowed to attend the annual meetings.
  C) most preferred stock does not have voting rights.
  D) only institutional investors are allowed to attend the meetings.
  E) she can vote only by proxy and not in person.

[coreycathey]

Answer to Question 1

Peter can get funding from personal resources. Most new firms typically tap personal resources such as family, friends, and credit cards. According to Consumer Reports, 68 percent of total start-up financing comes from personal resources. If individuals do borrow from family or friends, virtually every small business expert recommends that they keep the relationship as professional as possible. If the business fails, a professional agreement can preserve personal ties. And if the business succeeds, they will need top-quality documentation of financing from family and friends to get larger-scale backing from outside sources.
Personal credit cards can be an especially handy-though highly risky-financing resource. In fact, a recent survey found that nearly half of all start-ups are funded with plastic. Credit cards do provide fast, flexible money, but if individuals do not pay back their card companies fast, they will find themselves socked with financing fees that can take years to pay off.

Answer to Question 2

C